Cruz vs. Court of Appeals

A check issued as evidence of debt, though not intended to be presented for payment, has the same effect as an ordinary check and falls within the ambit of B.P. 22; the payee's knowledge of the drawer's insufficient funds is immaterial because deceit is not an essential element of the offense.

Complaining witness Andrea Mayor is a businesswoman engaged in, among other things, granting interest-bearing loans and rediscounting checks at interest rates of 3% to 5% monthly. Petitioner Roberto Cruz was engaged in the business of selling ready-to-wear clothes at the Pasay Commercial Center. The two were introduced sometime in 1987 through petitioner's sisters, after which petitioner began borrowing money from Mayor and had several prior check rediscounting transactions with her.

Andrea Mayor, a businesswoman engaged in granting interest-bearing loans and rediscounting checks, was introduced to Roberto Cruz sometime in 1987 through his sisters. Cruz was then engaged in the ready-to-wear clothing business at the Pasay Commercial Center. From that introduction onward, Cruz borrowed money from Mayor, and she had rediscounted several of his personal checks in prior transactions — in the amounts of P20,000, P5,000, P9,000, and P5,000 — which had bounced when presented but were subsequently paid in cash by Cruz upon notification of the dishonor.

On March 15, 1989, Cruz told Mayor that he needed P176,000 and asked to be lent that amount. On April 6, 1989, Mayor delivered the sum to Cruz at his stall at the Pasay Commercial Center. Cruz, in turn, issued Premiere Bank Check No. 057848, postdated April 20, 1989, for the same amount, signed in Mayor's presence. Mayor was told that Cruz might be able to pay before the due date. When the check matured, Mayor presented it to the drawee bank for payment, but it was dishonored and returned for the reason "account closed." Upon notification of the dishonor, Cruz promised to raise the amount by May 15, 1989, but failed to make good his commitment. Mayor then consulted a lawyer and caused the preparation of a criminal complaint.

Marcelo Ladao, a representative of Premiere Development Bank, testified that Cruz had opened Current Account No. 0101-00250-5 on May 15, 1987, affixing three signatures on the signature card. The account was closed on October 2, 1989, and Cruz was duly advised of the closure by the Branch Manager of the Pasay City Branch. Ladao identified the stamp on the face of the check indicating that the account was already closed, and explained that closure normally results from a series of checks issued without sufficient funds.

At the pre-trial, petitioner admitted the existence of the check. During trial, however, Cruz proffered a defense of denial: he denied having issued the subject check, denied that the signature "R. Cruz" appearing thereon was his, and denied knowing Andrea Mayor or having any previous transactions with her. He testified that he saw the check for the first time only on January 16, 1991, when it was shown to him by the fiscal. He admitted, however, opening a current account with Premiere Development Bank. The trial court rejected his defense and convicted him. On appeal to the Court of Appeals, petitioner changed his theory — admitting that he had issued the check after receiving P176,000 from Mayor, but claiming it was merely a memorandum of indebtedness not intended for circulation or negotiation.

• Reversible Error of the Court of Appeals: Petitioner argued that the Court of Appeals committed reversible error and grave abuse of discretion amounting to lack or excess of jurisdiction in affirming the trial court's finding on the basis of surmises, conjectures, and unfounded conclusions.
• Knowledge of the Payee: Petitioner maintained that the Court of Appeals erred in holding him liable under B.P. 22 despite the complaining witness's knowledge that his account had long been closed, contending that the payee's awareness supported his claim that he did not intend to put the check in circulation or ensure its payment.
• Change of Theory as Basis for Dismissal: Petitioner argued that the Court of Appeals erred in holding that his "complete turnabout" rendered his appeal devoid of merit.

• Liability Under B.P. 22: Whether petitioner is liable for violation of B.P. 22 for issuing a check knowing he does not have credit with the drawee bank and thereafter claiming that the check was not intended for circulation, having been issued only as a memorandum of indebtedness.
• Effect of Payee's Knowledge: Whether the payee's knowledge of the drawer's closed account affects liability under B.P. 22.
• Change of Theory on Appeal: Whether petitioner may change his theory from complete denial of issuance to admission of issuance without intent to circulate.

• Liability Under B.P. 22: Yes. A check issued as evidence of debt, though not intended for presentation, has the same effect as an ordinary check and falls within the ambit of B.P. 22, which punishes the issuance of any check knowing at the time of issue that the drawer does not have sufficient funds.
• Effect of Payee's Knowledge: No, the payee's knowledge is immaterial. Deceit is not an essential element of an offense penalized by B.P. 22; the gravamen of the offense is the issuance of a bad check.
• Change of Theory on Appeal: No. A party who adopts a certain theory and has the case tried and decided upon that theory in the court below will not be permitted to change that theory on appeal, as it would be unfair to the opposing party and offensive to the basic rules of fair play, justice, and due process.

• Liability Under B.P. 22: The issuance of the check was no longer at issue, as petitioner himself admitted on appeal to the Court of Appeals that he had issued the check after receiving P176,000 from the complaining witness. The Court held that a check issued as evidence of debt, though not intended to be presented for payment, has the same effect as an ordinary check. B.P. 22 makes no distinction as to whether the checks within its contemplation are issued in payment of an obligation or merely to guarantee the same; pursuant to the rule of statutory construction, where the law makes no distinction, none may be made by interpretation. The legislative history of B.P. 22 — originally Cabinet Bill No. 9 — confirms this intent: the original text contained a proviso excluding checks issued as mere guarantee, but the final version deliberately deleted that proviso to make enforcement more effective. What the law punishes is the issuance of a bouncing check, not the purpose for which it was issued. The mere act of issuing a worthless check is malum prohibitum. The importance of arresting the proliferation of worthless checks was underscored, as unfunded checks in circulation injure not only the payee but the public and the banking system.

• Effect of Payee's Knowledge: Petitioner contended that Mayor's awareness that his account was closed supported his claim that he did not intend to put the check in circulation. The Court rejected this, holding that the payee's knowledge of the insufficiency or lack of funds is immaterial because deceit is not an essential element of a B.P. 22 offense. The gravamen of the offense is the issuance of a bad check; malice and intent in the issuance are inconsequential. The fact that the check was restricted is likewise of no moment, as cross checks or restricted checks are negotiable instruments within the coverage of B.P. 22.

• Change of Theory on Appeal: Petitioner first denied issuing the check, then on appeal admitted issuance but claimed it was merely a memorandum of indebtedness. The Court held that such a change of theory cannot be allowed. When a party adopts a certain theory and the case is tried and decided upon that theory in the court below, the party will not be permitted to change his theory on appeal, as doing so would be unfair to the other party and offensive to the basic rules of fair play, justice, and due process. Additionally, the issue raised primarily involved a question of fact; the Court's jurisdiction in cases brought from the Court of Appeals is limited to reviewing errors of law, the findings of fact of the Court of Appeals being conclusive. Barring any showing that the findings are totally devoid of support in the record, such findings must stand.

• B.P. 22 Applies to Checks Issued as Guarantee or Memorandum of Indebtedness — The Bouncing Checks Law makes no distinction between checks issued in payment of an obligation and those issued merely to guarantee or evidence the same. The original text of Cabinet Bill No. 9 contained a proviso excluding checks issued as mere guarantee, but the final version deliberately deleted that proviso. Accordingly, a check issued as evidence of debt, though not intended for presentation, has the same effect as an ordinary check and falls within the ambit of B.P. 22. What the law punishes is the issuance of a bouncing check, not the purpose for which it was issued.

• Malum Prohibitum Nature of B.P. 22 — The mere act of issuing a worthless check is malum prohibitum. Deceit is not an essential element; malice and intent in the issuance of the check are inconsequential. The gravamen of the offense is the issuance of a bad check, and the payee's knowledge of the drawer's insufficient funds is immaterial.

• Prohibition Against Change of Theory on Appeal — When a party adopts a certain theory and the case is tried and decided upon that theory in the court below, the party will not be permitted to change his theory on appeal. To allow such a change would be unfair to the opposing party and offensive to the basic rules of fair play, justice, and due process.

• Conclusiveness of Court of Appeals Findings of Fact — In cases brought to the Supreme Court from the Court of Appeals, jurisdiction is limited to reviewing errors of law; the findings of fact of the Court of Appeals are conclusive. Barring any showing that the findings are totally devoid of support in the record, such findings must stand.

• "A check issued as an evidence of debt, though not intended to be presented for payment has the same effect of an ordinary check, hence, falls within the ambit of B.P. 22" — This passage states the ratio decidendi: that the purpose for which a check is issued does not remove it from the coverage of the Bouncing Checks Law.

• "What the law punishes is the issuance of a bouncing check, not the purpose for which it was issued nor the term and conditions relating to its issuance. The mere act of issuing a worthless check is malum prohibitum." — This formulation articulates the doctrinal basis for B.P. 22 liability, emphasizing that intent and purpose are irrelevant to the offense.

• "Knowledge of the payee of the insufficiency or lack of funds of the drawer with the drawee bank is immaterial as deceit is not an essential element of an offense penalized by B.P. 22." — This passage defines the scope of the offense by excluding deceit as an element, confirming that the payee's awareness cannot exculpate the drawer.

• "When a party adopts a certain theory, and the case is tried and decided upon that theory in the court below, he will not be permitted to change his theory on appeal for to permit him to do so would not only be unfair to the other party but it would also be offensive to the basic rules of fair play, justice and due process." — This is the canonical formulation of the rule against shifting theories on appeal, frequently cited in subsequent jurisprudence.

• Lozano vs. Martinez, 146 SCRA 523 — Controlling precedent on the nature of B.P. 22 as penalizing the issuance of bouncing checks and the public interest in preventing worthless checks from polluting channels of trade and commerce. Followed and relied upon for the proposition that the mischief of unfunded checks injures the banking system and public welfare.

• Que vs. People, 154 SCRA 160 — Followed for the proposition that B.P. 22 applies to checks issued as guarantee or deposit, citing the legislative history of the deletion of the proviso excluding guarantee checks, and that the mere act of issuing a worthless check is malum prohibitum.

• People vs. Nitafan, 215 SCRA 79 — Cited for the principle that a check issued as evidence of debt has the same effect as an ordinary check, which in turn relied on American authorities Cushing vs. Gore and Dykers vs. Leather Manufacturers' Bank.

• BA Finance Corporation vs. Court of Appeals, 201 SCRA 157 — Leading case among a long line of citations for the rule that a party may not change his theory on appeal.

• Bunag, Jr. vs. Court of Appeals, 211 SCRA 440 — Cited for the rule that the Supreme Court's jurisdiction in cases from the Court of Appeals is limited to reviewing errors of law, the findings of fact of the Court of Appeals being conclusive.

• Section 1, Batas Pambansa Bilang 22 — Defines the offense: any person who makes or draws and issues any check to apply for an account or for value, knowing at the time of issue that he does not have sufficient funds in or credit with the drawee bank, which check is subsequently dishonored by the drawee bank for insufficiency of funds or credit, shall be punished by imprisonment. The Court emphasized the phrase "any check" to show that the law makes no distinction as to the purpose of issuance, thereby encompassing checks issued as memoranda of indebtedness or guarantees.

Cruz, Davide Jr., Bellosillo, and Quiason, JJ., concurred.