People vs. Ojeda

Good faith and full payment of dishonored checks rebut the prima facie presumption of deceit in estafa by postdating a check, and absent proof of actual receipt by the accused of the notice of dishonor, conviction for both estafa under Article 315(2)(d) of the Revised Penal Code and violation of B.P. Blg. 22 cannot stand.

Appellant Cora Abella Ojeda was a businesswoman who purchased fabrics (telas) from complainant Ruby Chua. For approximately three years prior to the transactions in question, Ojeda routinely used postdated checks as her mode of payment for fabrics bought from Chua. The operative transactions occurred in November and December 1983, a period marked by severe economic disruption in the Philippines following the assassination of former Senator Benigno Aquino Jr., which triggered capital flight and widespread business closures.

Appellant Cora Abella Ojeda was a regular customer of complainant Ruby Chua, from whom she purchased fabrics and textile materials. For approximately three years, Ojeda transacted business with Chua, consistently using postdated checks as her mode of payment for the fabrics she bought. On November 5, 1983, Ojeda purchased from Chua various fabrics and textile materials worth ₱228,306.60, for which she issued twenty-two postdated checks bearing different dates and amounts drawn against Rizal Commercial Banking Corporation.

Chua later presented check no. 033550 dated November 5, 1983 in the amount of ₱17,100 to the bank for payment, but it was dishonored due to "Account Closed." On April 10, 1984, Chua deposited the rest of the checks, but all were likewise dishonored for the same reason. Demands were allegedly made on Ojeda to make good the dishonored checks, to no avail. Estafa and BP 22 charges were thereafter filed against Ojeda in twenty-one separate Informations — one for estafa in Criminal Case No. 88-66228 and twenty for violation of BP 22 in Criminal Case Nos. 88-66229 to 88-66248. The cases were consolidated, and Ojeda pleaded not guilty to each charge on arraignment.

Ojeda admitted issuing the postdated checks that were the subject of the criminal cases, with the exception of six checks which did not bear her signature but were instead signed by her husband. She alleged that she had told Chua not to deposit the postdated checks on maturity as they were not yet sufficiently funded. Ojeda also claimed that she made partial payments to Chua in the form of finished garments worth ₱50,000, a claim that the prosecution did not rebut. She explained that her failure to fund the checks was caused by the collapse of her business in the wake of the economic turmoil following the Aquino assassination in 1983, when her own customers failed to pay her. Eventually, according to an affidavit of desistance executed by Chua, Ojeda fully paid her entire monetary obligation of ₱228,306.

The trial court convicted Ojeda of estafa under paragraph 2(d) of Article 315 of the Revised Penal Code and sentenced her to reclusion perpetua. It also convicted her of fourteen counts of violation of BP 22, reasoning that two of the twenty-two checks were not covered by the indictment and six were not signed by Ojeda but by her husband, in the absence of any showing of conspiracy. The remaining six BP 22 charges were dismissed for insufficiency of evidence. Ojeda's appeal was initially dismissed by the Supreme Court for failure of counsel to file the appellant's brief, but was subsequently reinstated after the Court recalled its prior resolutions for humanitarian reasons, prompted by Chua's affidavit of desistance confirming full payment.

• Absence of Deceit: Appellant argued that no deceit was employed when she issued the checks because she never assured Chua that the checks were funded; Chua allegedly knew all along that the checks were merely intended to guarantee future payment, consistent with their three-year practice of using postdated checks.
• Good Faith: Appellant maintained that she acted in good faith throughout her transactions with Chua, explaining that her failure to fund the checks was caused by the economic collapse following the 1983 Aquino assassination, which shut down her business when her own customers failed to pay. She made partial payments in the form of finished garments worth ₱50,000 and eventually fully paid her debts, as admitted by complainant in her affidavit of desistance.
• Lack of Notice of Dishonor: Appellant denied receiving any notice of dishonor of the checks and claimed she was not even aware that cases had been filed against her for violation of BP 22. Without proof of notice of dishonor, she argued she could not be convicted of violation of BP 22.
• 90-Day Presumption Period: Appellant pointed out that of the fourteen checks cited in the trial court's decision, only one was deposited within ninety days from its due date; the rest were deposited on April 10, 1984, more than ninety days from the date of the last check, so the prima facie presumption of knowledge of insufficient funds under Section 2 of BP 22 does not apply.

• Criminal Liability for Worthless Checks: The Solicitor General contended that appellant was criminally liable for issuing worthless checks, arguing that Chua accepted the postdated checks as payment because of appellant's good credit standing and was confident the checks were good, such that no express assurances from appellant that the checks were funded were needed for Chua to part with her goods.
• Deceit Through Simultaneous Exchange: The Solicitor General argued that there was a simultaneous exchange of textile materials and checks between the parties, and that Chua would not have parted with her telas had she known the checks would not clear. Appellant knew her account had already been closed yet did not inform Chua that the checks could not be cashed upon maturity, thereby deceiving Chua into parting with her goods.

• Estafa — Deceit and Good Faith: Whether the element of deceit was established in the issuance of postdated checks, or whether appellant's evidence of good faith and full payment rebutted the prima facie presumption of deceit.
• BP 22 — Notice of Dishonor: Whether the prosecution proved that appellant received the requisite notice of dishonor of the checks necessary for conviction under B.P. Blg. 22.
• BP 22 — 90-Day Presumption Period: Whether the prima facie presumption of knowledge of insufficient funds under Section 2 of BP 22 applies when thirteen of the fourteen checks were deposited beyond the ninety-day period prescribed by the statute.

• Estafa — Deceit and Good Faith: No. The prima facie presumption of deceit was successfully rebutted by appellant's evidence of good faith, including partial payment in kind and eventual full payment of the entire amount, as admitted by complainant in her affidavit of desistance.
• BP 22 — Notice of Dishonor: No. The prosecution failed to prove that the notice of dishonor was actually sent to and received by appellant; the registry return receipt was not authenticated, and complainant merely presumed receipt. Without proof of notice of dishonor, knowledge of insufficiency of funds cannot be presumed and no crime can be deemed to exist.
• BP 22 — 90-Day Presumption Period: Not separately ruled upon. The acquittal on BP 22 charges was predicated on the more fundamental ground of lack of notice of dishonor, which was dispositive of all BP 22 counts regardless of the 90-day period issue.

• Estafa — Deceit and Good Faith: Under paragraph 2(d) of Article 315 of the RPC, as amended by RA 4885, the elements of estafa are: (1) a check is postdated or issued in payment of an obligation contracted at the time it is issued; (2) lack or insufficiency of funds to cover the check; and (3) damage to the payee. Deceit and damage are essential elements that must be established by satisfactory proof. A prima facie presumption of deceit arises when the drawer fails to deposit the amount needed to cover the check within three days from receipt of notice of dishonor. However, this presumption is rebuttable. Good faith is a valid defense in estafa by postdating a check and may be demonstrated by a debtor's offer to arrange a payment scheme with the creditor. In this case, appellant not only made arrangements for payment and delivered finished garments worth ₱50,000 as partial payment, but complainant herself categorically stated in an affidavit of desistance that appellant had fully paid the entire amount of ₱228,306. The principle actus non facit reum, nisi mens sit rea — no crime is committed if the mind of the person performing the act is innocent — applies. Appellant's extraordinary efforts to pay despite her own business and financial reverses demonstrated the absence of criminal intent, negating the element of deceit.

• BP 22 — Notice of Dishonor: The prosecution presented virtually no evidence that the indispensable notice of dishonor was sent to and received by appellant. Complainant testified that her lawyer prepared and sent a demand letter dated March 16, 1988, but when asked whether appellant received it, complainant could only state that she "presumed" receipt. The prosecution presented a registry return receipt bearing a signature, but it was not authenticated or identified. A registry receipt alone is insufficient as proof of mailing; receipts for registered letters and return receipts must be properly authenticated to serve as proof of receipt. When appellant denied receiving the demand letter, the burden shifted to the prosecution to prove actual receipt, which it failed to discharge. Notice of dishonor is required under both Article 315(2)(d) of the RPC (giving the drawer three days to cover the check) and Section 2 of BP 22 (giving the maker or drawer five banking days to pay). Without proof of notice of dishonor, knowledge of insufficiency of funds cannot be presumed and no crime — whether estafa or violation of BP 22 — can be deemed to exist. The absence of notice also violated appellant's right to procedural due process, as it deprived her of the opportunity to avert prosecution by making payment within the statutory period.

• BP 22 — 90-Day Presumption Period: While appellant raised the argument that thirteen of the fourteen checks were deposited beyond the ninety-day period prescribed by Section 2 of BP 22, such that the prima facie presumption of knowledge of insufficient funds should not apply, the Court did not separately rule on this issue. The acquittal on all BP 22 counts was based on the more fundamental and dispositive ground of lack of notice of dishonor, which precluded conviction regardless of whether the presumption under Section 2 applied.

• Good faith as a defense in estafa by postdating a check — The prima facie presumption of deceit arising from the issuance of a dishonored check is rebuttable. Good faith may be demonstrated by a debtor's offer to arrange a payment scheme, partial payments, or full payment of the dishonored checks. In this case, appellant's partial payment in kind (₱50,000 in finished garments) and eventual full payment, as admitted by complainant in her affidavit of desistance, successfully rebutted the presumption of deceit.

• Actus non facit reum, nisi mens sit rea — No crime is committed if the mind of the person performing the act complained of is innocent. Evil intent must unite with an unlawful act for there to be a crime. The accused may prove that he acted in good faith and had no intention to convert money or goods for personal benefit. Applied here to negate the element of criminal intent in estafa, given appellant's extraordinary efforts to pay despite business reverses.

• Notice of dishonor as an indispensable requirement for prosecution — Under both Article 315(2)(d) of the RPC and Section 2 of BP 22, proof that the accused received notice of dishonor is necessary for prosecution. The RPC gives the drawer three days from receipt of notice to cover the check; BP 22 gives the maker or drawer five banking days from receipt of notice to pay. Without proof of notice of dishonor, knowledge of insufficiency of funds cannot be presumed and no crime can be deemed to exist. The absence of notice deprives the accused of the opportunity to preclude criminal prosecution by making payment within the statutory period, violating procedural due process.

• Proof of service of notice by registered mail — When service of notice is an issue, the person alleging that the notice was served must prove the fact of service. A registry receipt alone is insufficient as proof of mailing. Receipts for registered letters and return receipts do not prove themselves; they must be properly authenticated in order to serve as proof of receipt of the letters. The burden of proving receipt rests upon the party asserting it, and the quantum of proof required in a criminal case is proof beyond reasonable doubt.

• "No crime is committed if the mind of the person performing the act complained of is innocent." — This passage articulates the mens rea principle as applied to estafa by postdating a check, establishing that criminal intent is indispensable and that good faith negates criminal liability.

• "Without proof of notice of dishonor, knowledge of insufficiency of funds cannot be presumed and no crime (whether estafa or violation of BP 22) can be deemed to exist." — This is the ratio decidendi for the acquittal on both estafa and BP 22 charges, synthesizing the requirement of notice of dishonor under both statutes.

• "Receipts for registered letters and return receipts do not prove themselves; they must be properly authenticated in order to serve as proof of receipt of the letters." — This defines the evidentiary standard for proving service of notice by registered mail, a frequently cited formulation in subsequent jurisprudence on proof of notice.

• "The absence of a notice of dishonor necessarily deprives an accused an opportunity to preclude a criminal prosecution. Accordingly, procedural due process clearly enjoins that a notice of dishonor be actually served on petitioner." — Quoted from Lao vs. Court of Appeals, this passage establishes the due process dimension of the notice-of-dishonor requirement, framing it not merely as a statutory element but as a constitutional safeguard.

• People vs. Chua, 315 SCRA 326 (1999) — Cited for the elements of estafa under paragraph 2(d) of Article 315 of the RPC: postdated check issued in payment of an obligation, lack or insufficiency of funds, and damage to the payee.

• People vs. Gulion, 349 SCRA 610 (2001); Vallarta vs. Court of Appeals, 150 SCRA 336 (1987); People vs. Villapando, 56 Phil. 31 (1931) — Cited for the proposition that good faith is a valid defense in estafa by postdating a check, rebutting the prima facie presumption of deceit.

• Tabuena vs. Sandiganbayan, 268 SCRA 332 (1997) — Cited for the principle that criminal intent must concur with the unlawful act, and that no crime exists when the criminal mind is wanting.

• Lecaroz vs. Sandiganbayan, 305 SCRA 396 (1999) — Cited for the principle that an accused may prove good faith and absence of intent to convert money or goods for personal benefit.

• Ting vs. Court of Appeals, 344 SCRA 551 (2000) — Cited for the rule that a registry receipt alone is insufficient as proof of mailing and that return receipts must be properly authenticated to serve as proof of receipt.

• Caras vs. Court of Appeals, 366 SCRA 371 (2001) — Cited in support of acquittal where the prosecution failed to establish notice of dishonor.

• Lao vs. Court of Appeals, 274 SCRA 572 (1997) — Cited for the due process requirement that notice of dishonor must be actually served on the accused, affording the opportunity to avert prosecution by making payment within the statutory period; full payment within five banking days from notice is a complete defense.

• Article 315, paragraph 2(d), Revised Penal Code (as amended by RA 4885) — Defines estafa by postdating a check or issuing a check in payment of an obligation when the offender had no funds in the bank or insufficient funds. The failure of the drawer to deposit the amount necessary to cover the check within three days from receipt of notice of dishonor constitutes prima facie evidence of deceit. Applied to determine whether the elements of estafa — particularly deceit and damage — were established.

• Section 2, B.P. Blg. 22 — Provides that the making, drawing, and issuance of a check payment of which is refused by the drawee for insufficient funds, when presented within ninety days from the date of the check, shall be prima facie evidence of knowledge of such insufficiency, unless the maker or drawer pays the holder or makes arrangements for payment in full within five banking days after receiving notice that the check has not been paid. Applied to determine whether the prosecution proved notice of dishonor and whether the 90-day presumption period applied.

Vitug, Sandoval-Gutierrez, and Carpio-Morales, JJ., concurred.