Lim v. Court of Appeals

Violation of B.P. Blg. 22 is a transitory or continuing offense, permitting trial in any court of a municipality or territory where any essential ingredient of the crime occurred; the issuance and delivery of a check to the payee at the payee's place of business constitutes a material act that fixes venue in that territory.

Manuel Lim and Rosita Lim, spouses, served as president and treasurer, respectively, of Rigi Bilt Industries, Inc. (RIGI), a company engaged in the fabrication, installation, and building of steel structures. RIGI maintained a long-standing business relationship with Linton Commercial Company, Inc. (LINTON), its supplier of steel plates, steel bars, flat bars, and purlin sticks, with credit terms extending to 30, 60, and sometimes 90 days. The Lim spouses maintained an account with Consolidated Bank and Trust Company (SOLIDBANK), Grace Park Branch, Kalookan City. Administrative Order No. 3 defined the territorial jurisdiction of Regional Trial Courts in the National Capital Judicial Region by establishing branches over the municipalities of Malabon and Navotas with seats in Malabon.

Manuel Lim and Rosita Lim, spouses, were the president and treasurer, respectively, of Rigi Bilt Industries, Inc. (RIGI), a company engaged in the fabrication and building of steel structures. RIGI had a long-standing business relationship with Linton Commercial Company, Inc. (LINTON), which supplied steel plates, steel bars, flat bars, and purlin sticks, extending credit terms of 30, 60, and sometimes 90 days to the Lim spouses as RIGI officers.

On 27 May 1983, the Lims ordered 100 pieces of mild steel plates worth ₱51,815.00 from LINTON, delivered the same day to their place of business at 666 7th Avenue, 8th Street, Kalookan City. To pay for this delivery, they issued SOLIDBANK Check No. 027700, postdated 3 September 1983, in the amount of ₱51,800.00. On 30 May 1983, the Lims ordered another 65 pieces of mild steel plates worth ₱63,455.00, likewise delivered the same day, and issued SOLIDBANK Check No. 027699 in the amount of ₱63,455.00, postdated 20 August 1983. The Lims also ordered 2,600 "Z" purlins worth ₱241,800.00, delivered on various dates from 15 April 1983 to 9 June 1983. To pay for these deliveries, they issued five additional SOLIDBANK checks: Check No. 027683 dated 16 July 1983 for ₱27,900.00, Check No. 027684 dated 23 July 1983 for ₱27,900.00, Check No. 027719 dated 6 August 1983 for ₱32,550.00, Check No. 027720 dated 13 August 1983 for ₱27,900.00, and Check No. 027721 dated 27 August 1983 for ₱37,200.00.

When the seven checks were deposited with the Rizal Commercial Banking Corporation, they were dishonored for insufficiency of funds, with the additional notation "payment stopped" stamped on most of them. SOLIDBANK's signature verifier, Salvador Alfonso, testified that the checks were dishonored on various dates between 22 July 1983 and 5 September 1983, with reasons ranging from "Payment Stopped" to "Drawn Against Insufficient Fund" or both. Despite demand, the Lims refused to make good the checks or pay the value of the deliveries.

Manuel Lim admitted issuing the seven checks to pay for LINTON's deliveries but denied that the account had insufficient funds, presenting a bank ledger showing a balance of ₱65,752.75. He claimed he ordered SOLIDBANK to stop payment because the supplies delivered by LINTON did not conform to the specifications in the purchase orders. Rosita Lim was not presented to testify, as her statements would only be corroborative.

The trial court found both accused guilty of estafa and violation of B.P. Blg. 22 on 25 January 1989. On appeal, the Court of Appeals acquitted them of estafa, finding that the checks were not issued simultaneously with the deliveries, but affirmed the conviction for violation of B.P. Blg. 22. The Lims then filed a petition for review with the Supreme Court, challenging venue and the sufficiency of evidence.

• Venue and Jurisdiction: Petitioners maintained that the prosecution failed to prove that any essential element of the offense under B.P. Blg. 22 was committed within the jurisdiction of the RTC of Malabon, arguing that all acts material to the offense — issuance, delivery, and dishonor of the checks — occurred in Kalookan City, and thus the trial court of Malabon exceeded its jurisdiction.
• Knowledge of Insufficiency of Funds: Petitioners claimed that no evidence supported the proposition that they knew their checks were insufficiently funded, asserting that some checks were funded at the time of presentment but were dishonored only upon their instruction to stop payment.
• Stop Payment Justified: Petitioners argued that they ordered payment stopped because the goods delivered by LINTON were not those specified in their purchase orders, and that they had sufficient funds to cover the checks.
• Estafa: Petitioners contended they could not be held liable for estafa because the checks were issued several weeks after the deliveries of the goods.

• Venue and Jurisdiction: Whether the RTC of Malabon had jurisdiction over the cases for violation of B.P. Blg. 22, given that the checks were issued, received by LINTON's collector, and dishonored in Kalookan City.
• Knowledge of Insufficient Funds: Whether the prosecution proved that petitioners knew of the insufficiency of their funds at the time of issuance of the checks.
• Sufficiency of Funds and Validity of Stop Payment: Whether petitioners' claim of sufficient funds and their stop-payment order based on allegedly defective deliveries constituted a valid defense against conviction under B.P. Blg. 22.

• Venue and Jurisdiction: Yes. The RTC of Malabon had jurisdiction because violation of B.P. Blg. 22 is a transitory crime, and the checks were issued and delivered to the payee at LINTON's place of business in Navotas, which falls under the territorial jurisdiction of the RTC branches sitting in Malabon.
• Knowledge of Insufficient Funds: Yes. The prima facie evidence of knowledge of insufficient funds under Section 2 of B.P. Blg. 22 was not overcome, as petitioners neither paid the amounts due nor made arrangements for payment within five banking days after receiving notices of dishonor.
• Sufficiency of Funds and Validity of Stop Payment: No. The bank ledger showed the account balance was inadequate to cover the checks at the time of presentment, and the letters complaining of defective goods referred to different items than those for which the checks were issued.

• Venue and Jurisdiction: The Court applied Section 14(a), Rule 110 of the Revised Rules of Court, which provides that criminal actions shall be instituted and tried in the court of the municipality or province wherein the offense was committed or where any essential ingredient thereof took place. For transitory or continuing crimes, the court of either municipality where any material act occurred has jurisdiction. Violation of B.P. Blg. 22 is categorized as a transitory crime. The Court identified the material acts: (a) the checks were issued to LINTON at its place of business in Balut, Navotas; (b) they were delivered to LINTON at the same place; (c) they were dishonored in Kalookan City; and (d) petitioners had knowledge of insufficiency of funds. Under Section 191 of the Negotiable Instruments Law, "issue" means the first delivery of the instrument to a person who takes it as a holder. Citing People vs. Yabut, the Court explained that the receipt of the checks by LINTON's collector at the Lims' place of business in Kalookan City did not constitute issuance and delivery to the payee, because the collector was a mere employee, not a holder or agent with authority to take the checks as payee or indorsee. The checks were actually issued and delivered to LINTON at its place of business in Navotas. Venue is determined by the allegations in the Information, which alleged that the offenses were committed in Navotas, sufficient to vest jurisdiction in the RTC of Malabon under Administrative Order No. 3.

• Knowledge of Insufficient Funds: Section 2 of B.P. Blg. 22 establishes prima facie evidence of knowledge of insufficient funds when a check is refused by the bank for insufficiency of funds within ninety days from date, unless the drawer pays the amount or makes arrangements for payment within five banking days after receiving notice of dishonor. Petitioners did not pay LINTON the amounts due or make arrangements for payment within five banking days. Citing People vs. Grospe and People vs. Manzanilla, the Court held that knowledge of insufficiency of funds is a continuing eventuality, whether the accused is in one territory or another. The prima facie evidence was therefore not overcome.

• Sufficiency of Funds and Validity of Stop Payment: Petitioners' claim that they stopped payment because the goods were defective was refuted by the record. The two letters (Exhs. 21 and 22) complaining about the quality of goods referred to B.I. Lally columns (Sch. #20), not to the mild steel plates and "Z" purlins for which the checks were issued. While a civil case (Civil Case No. C-10921) found LINTON liable for delivering inferior B.I. pipes, those supplies were different from the purchases covered by the checks in question. Section 3 of B.P. Blg. 22 provides that notwithstanding receipt of a stop-payment order, the drawee bank shall state in the notice of dishonor that there were insufficient funds if such be the fact. The purpose is to preclude a drawer from using a stop-payment order as a pretext for lack of funds. The bank ledger confirmed that the account balance was inadequate to cover the checks at the time of presentment.

• Transitory or Continuing Crimes — A transitory or continuing crime is one in which some acts material and essential to the crime and requisite to its consummation occur in one municipality and some in another; in such cases, the court of either municipality has jurisdiction to try the case, the first court taking cognizance excluding the other. The Court applied this doctrine to hold that violation of B.P. Blg. 22 is a transitory crime, permitting trial in any municipality where any essential ingredient occurred.

• Prima Facie Evidence of Knowledge of Insufficient Funds (B.P. Blg. 22, Section 2) — The making, drawing, and issuance of a check payment of which is refused by the bank for insufficiency of funds, when presented within ninety days from date, constitutes prima facie evidence of knowledge of such insufficiency unless the drawer pays the holder the amount due or makes arrangements for payment within five banking days after receiving notice of dishonor. The Court held that petitioners failed to rebut this presumption because they neither paid nor arranged for payment within the prescribed period.

• Issuance Under the Negotiable Instruments Law (Section 191) — "Issue" means the first delivery of the instrument, complete in form, to a person who takes it as a holder; "holder" refers to the payee or indorsee in possession of the instrument, or the bearer thereof. The Court applied this definition to distinguish between delivery to a mere collector-employee and delivery to the payee, holding that receipt by LINTON's collector at the Lims' premises in Kalookan City did not constitute issuance to the payee; issuance occurred at LINTON's place of business in Navotas.

• Venue Determined by Allegations in the Information — Venue or jurisdiction in criminal cases is determined by the allegations in the Information. The Court relied on this principle, as reiterated in Lim vs. Rodrigo, to hold that the Informations' allegation that the offenses were committed in Navotas was controlling and sufficient to vest jurisdiction in the RTC of Malabon.

• "The gravamen of the offense is knowingly issuing a worthless check." — This passage defines the essential character of the offense under B.P. Blg. 22, establishing that knowledge and the worthlessness of the check are the core elements.

• "These are the so-called transitory or continuing crimes under which violation of B.P. Blg. 22 is categorized. In other words, a person charged with a transitory crime may be validly tried in any municipality or territory where the offense was in part committed." — This is the canonical formulation classifying B.P. Blg. 22 violations as transitory crimes, frequently cited in venue and jurisdiction analyses.

• "The receipt of the checks by the collector of LINTON is not the issuance and delivery to the payee in contemplation of law. The collector was not the person who could take the checks as a holder, i.e., as a payee or indorsee thereof, with the intent to transfer title thereto. Neither could the collector be deemed an agent of LINTON with respect to the checks because he was a mere employee." — This passage clarifies the distinction between delivery to a mere employee-collector and delivery to the payee as holder, a key point in determining where issuance occurs for venue purposes.

• "The purpose of this provision is precisely to preclude the maker or drawer of a worthless check from ordering the payment of the check to be stopped as a pretext for the lack of sufficient funds to cover the check." — This explains the rationale behind Section 3 of B.P. Blg. 22, preventing drawers from using stop-payment orders to mask insufficiency of funds.

• People vs. Yabut, 76 SCRA 624 (1977) — Controlling authority on the meaning of "issue" and "delivery" under the Negotiable Instruments Law; the Court relied on it to hold that receipt of checks by a mere collector-employee does not constitute delivery to the payee as holder, and that no agency relationship arises from a mere employer-employee connection absent proof of consent.
• People vs. Grospe, 157 SCRA 154 (1988) — Applied to support the proposition that knowledge of insufficiency of funds is a continuing eventuality and that violation of B.P. Blg. 22 is a transitory crime.
• People vs. Manzanilla, 156 SCRA 279 (1987) — Cited for the same propositions as Grospe regarding continuing knowledge and transitory nature of the offense.
• Lim vs. Rodrigo, 167 SCRA 487 (1988) — Applied for the rule that venue or jurisdiction is determined by the allegations in the Information.
• Cruz vs. IAC, 129 SCRA 490 (1984) — Cited for the definition of the gravamen of the offense under B.P. Blg. 22 as knowingly issuing a worthless check.
• Lozano vs. Martinez, 146 SCRA 323 (1986) — Cited for the essential element of knowledge of insufficiency of funds.

• Section 1, par. 1, B.P. Blg. 22 (Bouncing Checks Law) — Defines the offense punished: making, drawing, and issuing a check knowing at the time of issue that the drawer does not have sufficient funds, which check is subsequently dishonored or would have been dishonored had not the drawer, without valid reason, ordered stop payment. Applied as the primary statutory basis for conviction.
• Section 2, B.P. Blg. 22 — Establishes prima facie evidence of knowledge of insufficient funds upon dishonor within ninety days, unless the drawer pays or arranges payment within five banking days. Applied to hold that the presumption was not rebutted.
• Section 3, B.P. Blg. 22 — Provides that notwithstanding a stop-payment order, the drawee bank shall state in the notice of dishonor that there were insufficient funds if such be the fact. Applied to defeat petitioners' defense that they stopped payment for valid reasons.
• Section 14(a), Rule 110, Revised Rules of Court (Sec. 15(a), Rule 110, 1985 Rules on Criminal Procedure) — Governs the place where criminal actions are to be instituted and tried; applied to determine venue in this transitory offense.
• Section 191, Negotiable Instruments Law — Defines "issue" as the first delivery of the instrument to a person who takes it as a holder; applied to determine where the checks were issued for venue purposes.
• Administrative Order No. 3 — Defines the territorial jurisdiction of RTCs in the National Capital Judicial Region, establishing branches over Malabon and Navotas with seats in Malabon; applied to confirm the RTC of Malabon's jurisdiction.
• Article 315, par. 2(d), Revised Penal Code — Defines estafa through issuance of bouncing checks; petitioners were acquitted of this charge by the Court of Appeals.

Padilla, Davide, Jr., Kapunan, and Hermosisima, Jr., JJ., concurred.