Chua vs. People

A pairing judge who presided over cases that were already submitted for decision prior to the assumption of office of a designated acting presiding judge retains the authority — and indeed the mandatory duty — to decide those cases, notwithstanding the acting presiding judge's assumption of office; and the prosecution's failure to prove the accused's actual receipt of a notice of dishonor precludes the prima facie presumption of knowledge of insufficiency of funds under Section 2 of B.P. Blg. 22, warranting acquittal.

Petitioner John Dennis G. Chua obtained a series of loans from respondent Cristina Yao, whom he met through his mother, for the purpose of reviving a sugar mill business in Bacolod City. As payment, petitioner issued four checks that were subsequently dishonored for having been drawn against a closed account. The dispute centers on whether the prosecution established all elements of violation of Batas Pambansa Bilang 22, particularly the element of knowledge of insufficiency of funds, which depends on proof of receipt of a notice of dishonor. A secondary issue concerns the authority of a pairing judge to promulgate a decision after a designated acting presiding judge has assumed office, governed by Supreme Court Circular Nos. 19-98 and 5-98.

Petitioner John Dennis G. Chua became acquainted with respondent Cristina Yao through his mother. Sometime in the year 2000, petitioner's mother mentioned that her son would be reviving their sugar mill business in Bacolod City and asked whether Yao could lend them money. Yao acceded and loaned petitioner ₱1 million on 3 January 2001, another ₱1 million on 7 January 2001, and ₱1.5 million on 16 February 2001. She also lent petitioner an additional ₱2.5 million in June 2001. As payment, petitioner issued four checks in these amounts, but the checks were dishonored for having been drawn against a closed account. Upon dishonor, Yao personally delivered a demand letter to petitioner's office, which was received by his secretary.

Petitioner was charged with four counts of violation of B.P. Blg. 22 before the Metropolitan Trial Court, Branch 58, San Juan City. The cases were initially raffled to Branch 58, then presided by Judge Elvira DC Castro. On 16 September 2004, petitioner pleaded not guilty. After mediation and pre-trial, trial ensued before Pairing Judge Marianito C. Santos, as Judge Castro had been promoted to the RTC of Quezon City. On 25 July 2007, Judge Philip Labastida was appointed Presiding Judge of Branch 58 and took over the trial proceedings. Because petitioner failed to present evidence, the cases were submitted for decision and promulgation of judgment was set on 30 September 2008.

Sometime in December 2008, Judge Labastida died. On 20 February 2009, Judge Mary George T. Cajandab-Caldona was designated Acting Presiding Judge of Branch 58, and she assumed office on 1 April 2009. Meanwhile, on 15 April 2009, a decision was promulgated finding petitioner guilty beyond reasonable doubt of four counts of violation of B.P. Blg. 22. The decision was signed by Judge Santos as the pairing judge. The MeTC found that the prosecution established that the checks were issued as payment for a loan and that demand was made upon petitioner through his personal secretary. Petitioner was sentenced to pay a fine of ₱200,000 for each count, held civilly liable for the total amount of ₱6,082,000 with 12% interest per annum reckoned from the date of extrajudicial demand, and ordered to pay costs of suit.

Aggrieved, petitioner filed a petition for certiorari with the RTC assailing Judge Santos' authority to render the decision. The RTC affirmed the conviction, holding that the expanded authority of pairing courts under Circular No. 19-98 gave Judge Santos authority to resolve the criminal cases, which were submitted for decision before Judge Caldona's assumption of office. Petitioner's motion for reconsideration was denied. The MeTC's factual finding that the notice of dishonor was properly served was accepted without sufficient discussion of whether petitioner actually received it — the secretary who allegedly received the demand letter was never presented to testify.

• Authority of Pairing Judge: Petitioner argued that pursuant to Circular No. 19-98, decisions rendered by pairing judges are valid only when promulgated at a time when no presiding judge has been appointed, and that the authority of pairing judges automatically ceases upon the appointment and assumption to duty of a new presiding judge. He contended that since Judge Caldona assumed office on 1 April 2009, only she had the authority to promulgate a decision on 15 April 2009.
• Failure to Prove Notice of Dishonor: Petitioner maintained that the prosecution failed to prove that a notice of dishonor was properly served upon him, as he denied having received the demand letter and the secretary who allegedly received it was never presented to testify.
• Applicability of Circular No. 5-98: In his reply, petitioner countered that Circular No. 5-98 is not applicable because his case falls under Circular No. 19-98, which provides that the pairing judge's authority ceases upon the designation of an acting presiding judge. He argued that Judge Santos' authority was derived as a pairing judge, not as an acting or assisting judge, and thus automatically ceased on 20 February 2009 when Judge Caldona was designated.

• Authority of Pairing Judge: Respondent People of the Philippines, through the Office of the Solicitor General, averred that the cases were submitted for decision as early as 30 September 2008 and that Judge Caldona had not presided over a single hearing, making her unfamiliar with the facts of the case. The OSG argued that Circular No. 5-98 provides that cases submitted for decision and those that passed the trial stage before an acting or assisting judge shall be decided by the former, and that Judge Santos was clothed with authority to promulgate the decision.
• Procedural Remedy: The OSG implicitly supported the RTC's application of certiorari as the proper remedy, as the RTC ruled on the petition and denied it on the merits.

• Authority of Pairing Judge: Whether a decision promulgated and executed by a pairing judge, despite the appointment of a permanent judge to a court, is valid.
• Sufficiency of Evidence: Whether a decision admitting the prosecution's failure to prove all the elements of a crime, but still convicting an accused in a criminal case, is an act tantamount to grave abuse of discretion amounting to a lack or excess of jurisdiction.
• Propriety of Certiorari: Whether a petition for certiorari under Rule 65 of the Revised Rules of Court is the proper remedy for acts done by a presiding judge showing grave abuse of discretion amounting to a lack or excess of jurisdiction.

• Authority of Pairing Judge: Yes. The pairing judge had authority to render the assailed decision even after the acting presiding judge assumed office, because the cases were already submitted for decision at the time of assumption, making it mandatory under Circular No. 5-98 for the pairing judge to decide them.
• Sufficiency of Evidence: Yes, insofar as the MeTC convicted petitioner without proving all elements of B.P. Blg. 22. The prosecution failed to establish petitioner's actual receipt of the notice of dishonor, which is indispensable for the prima facie presumption of knowledge of insufficiency of funds to arise, warranting acquittal.
• Propriety of Certiorari: No. Appeal, not certiorari, is the proper remedy to question the MeTC decision. Certiorari and appeal are mutually exclusive, and the existence of the right to appeal prohibits resort to certiorari. Petitioner also failed to file a prior motion for reconsideration and disregarded the hierarchy of courts. However, the Court gave due course in the interest of prompt dispensation of justice.

• Authority of Pairing Judge: Both Circular No. 19-98 and Circular No. 5-98 are applicable and complement each other. Circular No. 19-98 provides that the pairing judge shall take cognizance of all cases as acting judge until the appointment and assumption to duty of a regular judge or the designation of an acting presiding judge. Circular No. 5-98 provides the exception: cases submitted for decision and those that passed the trial stage before the acting or assisting judge shall be decided by the former, even after the assumption of the presiding judge. In this case, Judge Santos presided over a significant portion of the proceedings, including the commencement of trial on 7 June 2006. The cases were submitted for decision before Judge Labastida's death in December 2008 and before Judge Caldona's assumption on 1 April 2009. The use of the word "shall" in Circular No. 5-98 makes it mandatory for Judge Santos to decide the cases. Judge Caldona never presided over a single hearing and was not familiar with the facts. Thus, Judge Santos had authority to render the decision on 15 April 2009.

• Sufficiency of Evidence: The essential elements of B.P. Blg. 22 are: (1) the making, drawing, and issuance of a check to apply for account or for value; (2) knowledge of the maker, drawer, or issuer that at the time of issue he does not have sufficient funds; and (3) the subsequent dishonor of the check by the drawee bank. The second element involves a state of mind difficult to establish, so Section 2 of B.P. Blg. 22 creates a prima facie presumption of knowledge. This presumption arises only after it is proved that the issuer received a notice of dishonor and failed to pay or make arrangements for payment within five banking days from receipt. The prosecution must prove actual receipt of the notice of dishonor, because the five-day period is reckoned from receipt. Here, Yao testified that petitioner's personal secretary received the demand letter, but the secretary was never presented to testify whether she in fact handed the demand letter to petitioner, who denied receiving it. Without proof of actual receipt, there is no way to ascertain when the five-day period would start and end. The MeTC merely stated that the requirement was fully complied with without sufficient discussion. Possibilities cannot replace proof beyond reasonable doubt. Absent proof of receipt of the notice of dishonor, the prima facie presumption of knowledge cannot arise, and the second element of the offense is not established.

• Propriety of Certiorari: It has been consistently held that where appeal is available, certiorari will not be entertained — the remedies are mutually exclusive, not alternative or successive. The proper remedy to obtain a reversal of judgment on the merits is appeal, even if the error ascribed is lack of jurisdiction or grave abuse of discretion. Petitioner also failed to comply with the requirement of a prior motion for reconsideration. Furthermore, petitioner did not establish grave abuse of discretion, which requires a capricious, whimsical, arbitrary, or despotic exercise of judgment equivalent to lack of jurisdiction. Finally, since petitioner filed an original action for certiorari with the RTC, the proper remedy after denial was to appeal to the CA by notice of appeal, not to file a petition for review with the Supreme Court, thereby disregarding the hierarchy of courts. Notwithstanding these procedural lapses, the Court resolved to give due course in the interest of prompt dispensation of justice.

• Prima facie presumption of knowledge of insufficient funds under B.P. Blg. 22 — The presumption under Section 2 of B.P. Blg. 22 that the issuer of a dishonored check had knowledge of insufficiency of funds arises only after it is proved that the issuer received a notice of dishonor and failed to pay the amount or make arrangements for payment within five banking days from receipt. The prosecution must prove actual receipt of the notice of dishonor by the accused; mere sending or delivery to a third party (e.g., a secretary) is insufficient. Without proof of receipt, there is no way to reckon the crucial five-day period, and the presumption cannot arise. The absence of notice deprives the accused of the opportunity to preclude criminal prosecution, violating procedural due process.

• Authority of pairing judges under Circular Nos. 19-98 and 5-98 — Under Circular No. 19-98, the pairing judge takes cognizance of all cases as acting judge until the appointment and assumption to duty of a regular judge or the designation of an acting presiding judge. Under Circular No. 5-98, which complements Circular No. 19-98, cases submitted for decision and those that passed the trial stage before the acting or assisting judge shall be decided by the former, even after the assumption of the presiding judge. The use of "shall" makes it mandatory. This authority includes resolutions of motions for reconsideration and motions for new trial thereafter filed; but if a new trial is granted, the newly appointed or designated presiding judge shall preside over it.

• Exclusivity of appeal and certiorari — Where appeal is available to the aggrieved party, the special civil action of certiorari will not be entertained. The remedies of appeal and certiorari are mutually exclusive, not alternative or successive. The existence and availability of the right of appeal prohibits resort to certiorari, one of the requirements for which is the unavailability of appeal.

• Retention of civil liability despite acquittal based on reasonable doubt — The extinction of the penal action does not carry with it the extinction of the civil action where: (a) the acquittal is based on reasonable doubt, as only preponderance of evidence is required for civil liability; (b) the court declares that the liability of the accused is only civil; and (c) the civil liability does not arise from or is not based upon the crime of which the accused was acquitted.

• "The presumption or prima facie evidence as provided in this section cannot arise, if such notice of non-payment by the drawee bank is not sent to the maker or drawer, or if there is no proof as to when such notice was received by the drawer, since there would simply be no way of reckoning the crucial 5-day period." — This passage, quoting from Yu Oh vs. CA, articulates the rationale for requiring proof of actual receipt of notice of dishonor: without it, the five-day period under Section 2 of B.P. Blg. 22 cannot be reckoned, and the prima facie presumption of knowledge of insufficiency of funds cannot arise.

• "It must be borne in mind that it is not enough for the prosecution to prove that a notice of dishonor was sent to the accused. The prosecution must also prove actual receipt of said notice, because the fact of service provided for in the law is reckoned from receipt of such notice of dishonor by the accused." — This is the controlling formulation of the rule on proof of notice of dishonor in B.P. Blg. 22 cases, distinguishing between mere sending and actual receipt, and is frequently cited in subsequent jurisprudence.

• "Possibilities, however, cannot replace proof beyond reasonable doubt." — This statement encapsulates the Court's rejection of the MeTC's assumption that the secretary must have handed the demand letter to the petitioner, emphasizing that the standard of proof in criminal cases demands certainty, not probability.

• "Both circulars are applicable in the case at bar in that Circular No. 5-98 complements Circular No. 19-98. Undoubtedly, the judge of the paired court serves as acting judge only until the appointment and assumption to duty of the regular judge or the designation of an acting presiding judge. Circular No. 5-98, however, provides an exception, i.e., the acting judge, despite the assumption to duty of the regular judge or the designation of an acting presiding judge, shall decide cases which are already submitted for decision at the time of the latter's assumption or designation." — This passage clarifies the interplay between Circular Nos. 19-98 and 5-98, establishing that the latter provides an exception to the general rule that a pairing judge's authority ceases upon the assumption of a presiding judge.

• Cuevas vs. Macatangay, G.R. No. 208506, 22 February 2017 — Cited for the doctrine that where appeal is available, certiorari will not be entertained; the remedies are mutually exclusive.
• Yu vs. Judge Reyes-Carpio, 667 Phil. 474 (2011) — Cited for the definition of "grave abuse of discretion" as requiring a capricious or whimsical exercise of judgment equivalent to lack of jurisdiction, and that certiorari is restricted to truly extraordinary cases where the lower court's act is wholly void.
• Yu Oh vs. CA, 451 Phil. 380 (2003) — Cited extensively for the rule that the prima facie presumption of knowledge of insufficiency of funds under Section 2 of B.P. Blg. 22 arises only upon proof of receipt of notice of dishonor, and that absence of such notice deprives the accused of the opportunity to preclude criminal prosecution.
• San Mateo vs. People, 705 Phil. 630 (2013) — Cited for the requirement that the prosecution must prove actual receipt of the notice of dishonor, not merely that it was sent.
• Daluraya vs. Oliva, 749 Phil. 531 (2014) — Cited for the doctrine that acquittal based on reasonable doubt does not extinguish civil liability, as only preponderance of evidence is required for civil liability.
• Alferez vs. People, 656 Phil. 116 (2011) — Cited for the essential elements of violation of B.P. Blg. 22.
• BF Citiland Corporation vs. Otake, 640 Phil. 261 (2010) — Cited for the rule that the proper remedy after denial of an original action for certiorari by the RTC is appeal to the CA by notice of appeal.

• Section 2, Batas Pambansa Bilang 22 — Creates the prima facie presumption of knowledge of insufficiency of funds. The presumption arises only after the issuer receives a notice of dishonor and fails to pay or make arrangements for payment within five banking days from receipt. Applied to hold that without proof of actual receipt of notice, the presumption cannot arise, warranting acquittal.
• Supreme Court Circular No. 19-98, dated 18 February 1998 — Expands the authority of pairing judges to include all matters, providing that the pairing judge shall take cognizance of all cases as acting judge until the appointment and assumption to duty of a regular judge or the designation of an acting presiding judge. Applied to establish the general rule that pairing judge authority ceases upon assumption of a presiding judge.
• Supreme Court Circular No. 5-98 — Provides the exception to Circular No. 19-98: cases submitted for decision and those that passed the trial stage before the acting or assisting judge shall be decided by the former, even after the assumption of the presiding judge. Applied to hold that Judge Santos had mandatory authority to decide the cases already submitted for decision before Judge Caldona's assumption.
• Rule 65, Rules of Court — Governs the special civil action of certiorari. Applied to hold that petitioner availed of the wrong remedy, as appeal was available and certiorari is mutually exclusive with appeal; petitioner also failed to file a prior motion for reconsideration and disregarded the hierarchy of courts.

Velasco, Jr., P.J. (Chairperson); Bersamin, J.; Leonen, J.; and Gesmundo, J. — all concurred with the decision. No separate concurring opinions were written.