Lunaria vs. People

A conviction under B.P. Blg. 22 may rest on a pre-signed check completed by the holder under Section 14 of the Negotiable Instruments Law, and lack of criminal intent is irrelevant because the offense is malum prohibitum; the court may nonetheless impose a fine alone instead of imprisonment under the applicable Supreme Court administrative circulars.

Rafael P. Lunaria and Nemesio Artaiz were partners in a money-lending business, with Lunaria as industrial partner and Artaiz as financer. Lunaria, then a cashier of Far East Bank and Trust Company in Meycauayan, Bulacan, would offer loans to borrowers whom his branch could not accommodate; Artaiz would issue checks to fund those loans, and Lunaria would issue checks to Artaiz for the amounts lent plus interest. To facilitate the arrangement, they exchanged pre-signed checks with blanks for payee, date, and amount, each authorized to fill the blanks on the other's advice. The dispute is governed by Batas Pambansa Blg. 22, which penalizes the issuance of worthless checks, and Section 14 of the Negotiable Instruments Law, which governs the filling of blanks in incomplete instruments.

Sometime in October 1988, Rafael P. Lunaria entered into a partnership agreement with Nemesio Artaiz for a money-lending business. Lunaria was the industrial partner and Artaiz the financer. Lunaria, then a cashier of Far East Bank and Trust Company in Meycauayan, Bulacan, would offer loans to prospective borrowers whom his branch could not accommodate. At the start, Lunaria would inform Artaiz of the proposed loan amount; Artaiz would issue a check charged against his bank account, the proceeds of which would go to the borrower; and Lunaria would issue a check to Artaiz corresponding to the amount lent plus the agreed share of interest.

The business progressed satisfactorily and sufficient trust developed between them. They agreed to issue pre-signed checks to each other for mutual convenience. The checks were signed but had no payee's name, date, or amount, and each was authorized to fill these blanks based on the other's advice.

The arrangement ended in November 1989, when Artaiz was no longer willing to continue the partnership. One of the checks issued by Lunaria to Artaiz was dishonored for insufficient funds. When Artaiz asked why the check had bounced, Lunaria told him that he had been implicated in a murder case and therefore could not raise the money to fund the check. Lunaria requested Artaiz not to deposit the other checks that would become due because he still had a case. Lunaria was charged with murder in December 1989 and detained until May 1990, when he was released on bail; he was eventually acquitted in December 1990.

According to Artaiz, he went to Lunaria in May 1990, after Lunaria had been released on bail, and demanded payment for the money owed. Lunaria again requested more time to prepare the money and collect on the loans, and Artaiz agreed. In June 1990, Lunaria allegedly went to Artaiz's residence, where both had an accounting. It was supposedly agreed that Lunaria owed Artaiz P844,000.00, and Lunaria issued a check in that amount, post-dated to December 1990.

When the check became due and demandable, Artaiz deposited it. The check was dishonored because the account had been closed. A demand letter was sent to Lunaria informing him of the dishonor and demanding payment. Artaiz also went to Lunaria's house to get a settlement. According to Artaiz, Lunaria proposed that his house and lot be given as security, but after Artaiz's lawyer prepared the document, Lunaria refused to sign. At this point, Artaiz filed the instant case.

• Reversal of Conviction: Petitioner alleged that the CA gravely erred in not reversing the RTC decision convicting him for violation of B.P. Blg. 22.
• Elements of B.P. Blg. 22: Petitioner argued that the prosecution failed to establish the elements of the crime.
• Making, Drawing, and Issuance: Petitioner maintained that the prosecution failed to establish that the subject check was duly "made" or "drawn" and "issued" by him.
• Consideration: Petitioner argued that the subject check was received by the private complainant without giving any consideration therefor.
• Credibility of Complainant: Petitioner contended that the oral testimony of the private complainant was full of serious inconsistencies and contradictions and should have been disregarded by the trial court.
• Hearsay: Petitioner argued that the private complainant's testimony should have been stricken from the records for being hearsay.
• Presumption of Innocence: Petitioner maintained that the prosecution dismally failed to overcome the presumption of innocence of the accused in criminal cases.
• Injustice: Petitioner argued that holding him liable for violation of B.P. Blg. 22 would result in a terrible injustice.
• Penalty: Petitioner argued in the alternative that the CA erred in not applying in his favor the rule of preference in the imposition of penalties in B.P. Blg. 22 cases, i.e., in not deleting the penalty of imprisonment and imposing a fine in lieu thereof.

• Reversal of Conviction: Whether the CA gravely erred in not reversing the RTC decision convicting petitioner for violation of B.P. Blg. 22.
• Elements of B.P. Blg. 22: Whether the prosecution failed to establish the elements of the crime of violation of B.P. Blg. 22.
• Making, Drawing, and Issuance: Whether the prosecution failed to establish that the subject check was duly "made" or "drawn" and "issued" by petitioner.
• Consideration: Whether the subject check was received by the private complainant without giving any consideration therefor.
• Credibility of Complainant: Whether the oral testimony of the private complainant was full of serious inconsistencies and contradictions and should have been disregarded by the trial court.
• Hearsay: Whether the private complainant's testimony should have been stricken from the records for being hearsay.
• Presumption of Innocence: Whether the prosecution dismally failed to overcome the presumption of innocence of the accused in criminal cases.
• Injustice: Whether holding petitioner liable for violation of B.P. Blg. 22 would result in a terrible injustice.
• Penalty: Whether the CA erred in not applying in petitioner's favor the rule of preference in the imposition of penalties in B.P. Blg. 22 cases, i.e., in not deleting the penalty of imprisonment and imposing a fine in lieu thereof.

• Reversal of Conviction: No. The first and second grounds are factual; a Rule 45 petition is confined to errors of law, and the CA's factual findings, especially when concurring with the RTC, are conclusive absent lack of substantiation.
• Elements of B.P. Blg. 22: Yes. The prosecution established the three elements of the offense.
• Making, Drawing, and Issuance: Yes. The pre-signed check was validly completed under Section 14 of the Negotiable Instruments Law, and petitioner failed to prove lack of authority on Artaiz's part to fill the blanks.
• Consideration: Yes. Consideration was established; a claim of lack of consideration pertains to total lack, and petitioner recognized an amount due to Artaiz.
• Credibility of Complainant: No. The challenge to the complainant's testimony was factual and did not overcome the conclusive findings of the CA and RTC.
• Hearsay: No. The claim that the testimony should be stricken as hearsay was a factual challenge, and the Court found no error in the CA's decision.
• Presumption of Innocence: No. The prosecution established the elements of the offense, and the conviction stands.
• Injustice: No. The conviction rests on established elements and conclusive factual findings; no injustice is shown.
• Penalty: Yes. The Court ruled for petitioner on penalty; the one-year imprisonment was set aside and a P200,000.00 fine imposed, with subsidiary imprisonment not exceeding six months.

• Reversal of Conviction: The first and second grounds raised by petitioner are essentially factual, impugning the finding of guilt by both the CA and the RTC. In an appeal by certiorari under Rule 45, the Court's jurisdiction is confined to reviews of errors of law ascribed to the CA. The Court is not a trier of facts, and the findings of fact by the CA are conclusive, more so when they concur with the factual findings of the RTC. Absent any showing that such findings are devoid of substantiation on record, the finding of guilt is conclusive.
• Elements of B.P. Blg. 22: The Court reviewed the records and found no error in the CA's holding that the prosecution established the elements: (1) the making, drawing, and issuance of any 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 in or credit with the drawee bank for payment of the check in full upon presentment; and (3) subsequent dishonor of the check by the drawee bank for insufficiency of funds or credit, or dishonor for the same reason had not the drawer, without any valid cause, ordered the bank to stop payment.
• Making, Drawing, and Issuance: Petitioner argued that the check was not "made" or "drawn" within the contemplation of the law because it was not complete in form when given to Artaiz. The CA correctly held that the exchange of pre-signed checks without date and amount had been the parties' practice for almost a year by virtue of their money-lending business, and they had authority to fill up blanks upon information that a check could then be issued. Under Section 14 of the Negotiable Instruments Law, where an instrument is wanting in any material particular, the person in possession has prima facie authority to complete it by filling up the blanks. Because of this presumption, the burden of proving lack of authority or that authority was exceeded rested on petitioner. He failed to prove lack of authority, so Artaiz was presumed to have been within his rights to fill up the blanks.
• Consideration: Petitioner claimed that the making and issuing of the check was devoid of consideration and that the transaction for which it was issued did not materialize. When lack of consideration is claimed, it pertains to total lack of consideration. The records showed that petitioner recognized there was an amount due to Artaiz, such that he had his own version of computation of the amount he owed. Consideration was also duly established in Artaiz's testimony. Lack of criminal intent on the part of the accused is irrelevant because the law has made the mere act of issuing a worthless check a malum prohibitum. Even payment through compensation or other means would not bar prosecution; the gravamen is the act of issuing a worthless check or a check dishonored upon presentment for payment, not the nonpayment of the obligation.
• Credibility of Complainant: The challenge to the complainant's testimony was part of petitioner's factual attack on the findings of guilt. The Court held that it is not a trier of facts and that the CA's factual findings are conclusive, especially when they concur with the RTC. The Court reviewed the records and found no error in the CA's holding that the elements of the crime were established.
• Hearsay: The claim that the private complainant's testimony should have been stricken as hearsay was likewise a factual challenge. The Court found no error in the CA's decision and upheld the conclusive factual findings that supported the conviction.
• Presumption of Innocence: The prosecution established the elements of the offense, and the factual findings of the lower courts were conclusive. The presumption of innocence was therefore overcome by proof beyond reasonable doubt as found by the RTC and affirmed by the CA.
• Injustice: The Court found no error in the conviction. The claim that holding petitioner liable would result in a terrible injustice did not overcome the established elements and the conclusive factual findings. The Court instead addressed the penalty and modified it to a fine alone.
• Penalty: The Court ruled for petitioner on penalty. Since 1998, the Court has held that it would best serve the ends of criminal justice if, in fixing the penalty for violation of B.P. Blg. 22, the same philosophy underlying the Indeterminate Sentence Law be observed, i.e., redeeming valuable human material and preventing unnecessary deprivation of personal liberty and economic usefulness with due regard to the protection of the social order. This policy was embodied in Supreme Court Administrative Circular No. 12-2000, authorizing the non-imposition of imprisonment in B.P. Blg. 22 cases. Administrative Circular No. 13-2001, as explained in Tan vs. Mendez, clarified that the Court is not decriminalizing B.P. Blg. 22 nor removing imprisonment as an alternative penalty; the determination of whether a fine alone is warranted rests solely upon the judge. Nevertheless, the case was ultimately a derivative of the breakdown of petitioner and Artaiz's partnership, precipitated by petitioner being implicated and detained for a murder charge, from which he was subsequently acquitted. Under the circumstances, and bearing in mind the guidelines in Administrative Circular No. 13-2004, a fine alone best served the interests of justice, pegged at the maximum amount provided by law, P200,000.00, with subsidiary imprisonment not exceeding six months in case of insolvency or nonpayment. Petitioner was also ordered to pay Artaiz P844,000.00 and the cost of suit.

• Elements of Violation of B.P. Blg. 22 — The offense requires: (1) the making, drawing, and issuance of any 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 in or credit with the drawee bank for payment of the check in full upon presentment; and (3) subsequent dishonor of the check by the drawee bank for insufficiency of funds or credit, or dishonor for the same reason had not the drawer, without any valid cause, ordered the bank to stop payment. The Court found all three elements established.
• B.P. Blg. 22 as Malum Prohibitum — The offense is malum prohibitum; lack of criminal intent is irrelevant. The law punishes the mere act of issuing a worthless check because it is deemed pernicious and inimical to public welfare. Even payment through compensation or other means does not bar prosecution. The gravamen is the act of issuing a worthless check or a check dishonored upon presentment for payment, not the nonpayment of the obligation. Applied: petitioner's lack of intent and claims of no consideration did not exonerate him.
• Negotiable Instruments Law, Section 14 — Prima Facie Authority to Fill Blanks — Where an instrument is wanting in any material particular, the person in possession has prima facie authority to complete it by filling up the blanks. The burden of proving lack of authority or that authority was exceeded rests on the person questioning it. Applied: the pre-signed checks exchanged by the parties could be filled up by Artaiz; petitioner failed to prove lack of authority.
• Consideration in B.P. Blg. 22 — A claim of lack of consideration pertains to total lack of consideration. Recognition of an amount due negates a claim of total lack. Applied: petitioner recognized an amount due to Artaiz and had his own computation, and consideration was established in Artaiz's testimony.
• Penalty in B.P. Blg. 22 — Non-Imposition of Imprisonment — The Court has adopted the policy that the philosophy underlying the Indeterminate Sentence Law should be observed in fixing the penalty for B.P. Blg. 22 violations, authorizing the non-imposition of imprisonment under Supreme Court Administrative Circular No. 12-2000. Administrative Circular No. 13-2001 clarified that this does not decriminalize the offense or remove imprisonment as an alternative penalty; the judge determines whether a fine alone is warranted. Administrative Circular No. 13-2004 provides guidelines. Applied: because the case arose from the breakdown of the parties' partnership and petitioner's murder charge and acquittal, a fine alone was imposed.
• Review under Rule 45 — Factual Findings Conclusive — In a petition for review on certiorari under Rule 45, the Court's jurisdiction is confined to errors of law. It is not a trier of facts, and the CA's factual findings are conclusive, more so when they concur with the RTC, absent a showing that they are devoid of substantiation on record. Applied: the Court refused to re-evaluate the facts and affirmed the conviction.

• "The law has made the mere act of issuing a worthless check a malum prohibitum, an act proscribed by legislature for being deemed pernicious and inimical to public welfare." — This passage defines the character of B.P. Blg. 22 as a malum prohibitum offense, making lack of criminal intent irrelevant to liability.
• "The gravamen of the offense under this law is the act of issuing a worthless check or a check that is dishonored upon its presentment for payment, not the nonpayment of the obligation." — This states the core of the offense and explains why even payment or compensation does not bar prosecution under B.P. Blg. 22.
• "Where the instrument is wanting in any material particular, the person in possession thereof has prima facie authority to complete it by filling up the blanks therein." — This is the Court's quotation of Section 14 of the Negotiable Instruments Law, which validated the parties' practice of exchanging pre-signed checks with blanks.
• "Under the circumstances of the case, and bearing in mind the guidelines set in Administrative Circular No. 13-2004, we deem the imposition of a fine alone would best serve the interests of justice, pegged at the maximum amount provided for by law, which is two hundred thousand pesos (P200,000.00)" — This passage articulates the Court's basis for setting aside imprisonment and imposing a fine alone in this B.P. Blg. 22 case.

• Tan vs. Mendez, 432 Phil. 760 (2002) — Cited for the rule that factual findings of the CA are conclusive and for the clarification that Administrative Circular No. 13-2001 did not decriminalize B.P. Blg. 22 nor remove imprisonment as an alternative penalty.
• Luis Wong vs. CA, G.R. No. 117857, February 2, 2001, 351 SCRA 100 — Cited in support of the conclusiveness of factual findings on appeal.
• Aleria Jr. vs. Velez, G.R. No. 127400, November 16, 1998, 298 SCRA 611, 618 — Cited for the same rule on factual findings.
• Ting vs. CA, 398 Phil. 481 (2000) — Cited for the elements of violation of B.P. Blg. 22.
• Sycip, Jr. vs. CA, G.R. No. 125059, March 17, 2000, 328 SCRA 447 — Cited for the elements of the offense.
• People vs. Lo Ho Wing, G.R. No. 88017, January 21, 1991, 193 SCRA 122, 130 — Cited for the rule that lack of criminal intent is irrelevant in B.P. Blg. 22 prosecutions.
• Macalalag vs. People, G.R. No. 164358, December 20, 2006, 511 SCRA 400 — Cited for the malum prohibitum character of B.P. Blg. 22 and the gravamen of the offense.
• Lozano vs. Martinez, G.R. No. L-63419, December 18, 1986, 146 SCRA 323, 338 — Cited for the rule that the gravamen is the issuance of a worthless check, not nonpayment of the obligation.
• Vaca vs. CA, G.R. No. 131714, November 16, 1998, 298 SCRA 656, 664 — Cited for the policy of applying the Indeterminate Sentence Law philosophy to B.P. Blg. 22 penalties.
• Lim vs. People, G.R. No. 130038, September 18, 2000, 340 SCRA 497, 504 — Cited for the same penalty policy.

• Batas Pambansa Blg. 22, Section 1 — Defines the offense and penalty for making, drawing, and issuing a check for account or value with knowledge of insufficient funds or credit, followed by dishonor. Applied: the Court found all elements established and imposed the maximum fine of P200,000.00.
• Negotiable Instruments Law, Section 14 — Provides that where an instrument is wanting in any material particular, the person in possession has prima facie authority to complete it by filling up the blanks. Applied: the pre-signed checks exchanged by the parties could be completed by Artaiz, and petitioner failed to prove lack of authority.
• Revised Rules of Court, Rule 45 — Governs petitions for review on certiorari and confines the Court's jurisdiction to errors of law. Applied: the Court refused to re-evaluate the factual findings of the CA and RTC.
• Supreme Court Administrative Circular No. 12-2000 — Authorizes the non-imposition of imprisonment in B.P. Blg. 22 cases. Applied: the Court imposed a fine alone instead of imprisonment.
• Supreme Court Administrative Circular No. 13-2001 — Clarifies Administrative Circular No. 12-2000, stating that B.P. Blg. 22 is not decriminalized and imprisonment remains an alternative penalty, with the judge determining whether a fine alone is warranted. Applied: the Court considered the circular but exercised its discretion to impose a fine alone.
• Supreme Court Administrative Circular No. 13-2004 — Provides guidelines for the imposition of penalties in B.P. Blg. 22 cases. Applied: the Court used the guidelines in deciding that a fine alone best served the interests of justice.

Carpio, Corona, Azcuna, and Leonardo-De Castro, JJ., concur.