Recuerdo vs. People

The defense of good faith in estafa under Article 315, paragraph 2(d) must be raised and substantiated during trial, not as an afterthought in a motion for reconsideration; partial or subsequent payments do not extinguish criminal liability already incurred, but only reduce civil liability pro tanto. The ruling in People vs. Ojeda is confined to its factual matrix—where the accused made extraordinary efforts to fully satisfy her obligations and the prosecution failed to prove notice of dishonor—and cannot be invoked where the accused refused to pay upon demand and only remitted funds after conviction on appeal.

Yolanda G. Floro was engaged in the business of buying and selling jewelry since 1985, operating from her residence in Meycauayan, Bulacan, and sometimes personally visiting customers to offer pieces. Joy Lee Recuerdo, a dentist by profession with a clinic at the Medical Towers in Legaspi Village, Makati City, was introduced to Floro by Floro's cousin Aimee Aoro in the first week of December 1993 and became her customer. The transactions at issue involved the purchase of jewelry by Recuerdo from Floro, paid for with postdated checks drawn against three different banks—Unitrust Development Bank, PCI Bank, and Prudential Bank—all of which were subsequently dishonored for being drawn against closed accounts. The legal framework governing the charges is Article 315, paragraph 2(d) of the Revised Penal Code, as amended by Republic Act No. 4885, which penalizes estafa committed by postdating or issuing a check in payment of an obligation contracted at the time the check was issued, when the offender had no funds or insufficient funds in the bank.

Yolanda G. Floro had been engaged in the business of buying and selling jewelry since 1985, regularly conducting business from her residence at No. 51 Interior, Poblacion, Meycauayan, Bulacan, though she would sometimes personally visit customers to show and offer pieces. In the first week of December 1993, Floro's cousin Aimee Aoro introduced her to Joy Lee Recuerdo, a dentist with a practice at the Medical Towers in Legaspi Village, Makati City. Recuerdo became Floro's customer, and sometime in the second week of December 1993, at around 7:30 in the evening, Recuerdo went to Floro's house in Meycauayan and purchased two pieces of jewelry: a 2.19-carat diamond round stone in white gold setting worth ₱220,000 and a 1.55-carat marquez loose diamond worth ₱130,000. For the diamond stone, Recuerdo issued ten postdated Unitrust Development Bank checks each in the amount of ₱22,000; six of these (Checks Nos. 014355–014360, totaling ₱132,000) became the subject of Criminal Case No. 2750-M-94. For the marquez diamond, she issued ten postdated PCI Bank checks each in the amount of ₱13,000; six of those (Checks Nos. 053051982A–053051987A, totaling ₱78,000) became the subject of Criminal Case No. 2807-M-94.

In another transaction on the early evening of February 7, 1994, Recuerdo again went to Floro's house and purchased a pair of diamond earrings worth ₱768,000. She issued seven postdated Prudential Bank checks—one for ₱168,000 as downpayment and six for ₱100,000 each representing the balance of ₱600,000 (Checks Nos. 0011783–0011788). The six ₱100,000 checks became the subject of Criminal Case No. 2751-M-94. Floro deposited all the checks at Liberty Savings & Loan Association in Meycauayan, Bulacan. Upon presentment by the depositary bank to the drawee banks on their respective maturity dates, the checks were dishonored for being drawn against closed accounts. Floro, through counsel, made formal demands requiring Recuerdo to pay the amounts represented by the dishonored checks, but Recuerdo continuously refused to pay.

Recuerdo was arraigned on March 1, 1995 in Criminal Case No. 2807-M-94 and on April 4, 1995 in Criminal Case Nos. 2750-M-94 and 2751-M-94, pleading not guilty to all charges with the assistance of counsel. The three cases were consolidated for joint trial. By way of defense, Recuerdo contended that the RTC of Malolos lacked jurisdiction because all essential elements of estafa occurred in Makati City, where her dental clinic was located and where she claimed the transactions took place. She further argued that the checks were not issued simultaneously with the purchase of the jewelry but only several days thereafter, after she had examined the jewelry and was satisfied with its quality. The trial court gave credence to Floro's testimony that the checks were issued simultaneously with the transactions and convicted Recuerdo of two counts of estafa. The Court of Appeals affirmed with modification as to the penalty. Recuerdo raised the defense of good faith only in her motion for reconsideration before the CA, citing partial funding of some checks and post-judgment payments made from January 4, 2005 to June 27, 2005.

• Good Faith and Absence of Deceit: Petitioner maintained that she acted in good faith, pointing out that out of 17 postdated checks, nine were honored by the drawee banks, and that she made partial cash payments and deposits to the private complainant's bank account even during the pendency of the case before the CA. She argued that her efforts to settle her civil obligations indicated no intent to defraud and that her failure to make good the checks reflected financial hardship, not deceit.
• Reliance on People vs. Ojeda: Petitioner argued that the facts of her case were parallel to those in People vs. Ojeda, where the Court held that a debtor's offer to arrange a payment scheme and payment of the obligation indicate good faith that successfully rebuts the presumption of deceit. She contended that the only difference was that in Ojeda, the accused fully settled her obligations, whereas she was still paying.
• Presumption of Innocence: Petitioner asserted that under the constitutional presumption of innocence, where two probabilities exist—one consistent with guilt and the other with innocence—the scales of justice should tilt in favor of innocence, and every circumstance against guilt and in favor of innocence must be taken into account, citing Borromeo vs. Court of Appeals, People vs. Clores, People vs. Bautista, and People vs. Benito Go Biong, Jr.
• Jurisdiction: Petitioner insisted that the RTC of Malolos, Bulacan had no jurisdiction because all essential elements of estafa occurred in Makati City, where her dental clinic was located and where she claimed the transactions and issuance of checks took place.
• Non-Simultaneous Issuance: Petitioner argued that the checks were not issued and delivered simultaneously with the purchase of the jewelry but only several days thereafter, after she had thoroughly examined the jewelry, thereby negating the element of deceit.
• Double Jeopardy and Defective Appeal: Petitioner contended that she was previously acquitted by the Municipal Trial Court of Meycauayan, Bulacan, Branch I, and that the appeal initiated by the private respondent was fatally defective because it was filed without the concurrence, permission, and authority of the provincial prosecutor.
• Exact Dates of Transaction and Issuance: Petitioner asserted that in estafa cases, it is of primordial significance for the prosecution to prove the exact date of the transaction and the exact date of the issuance of the checks, and that the prosecution failed to establish these dates with precision.

• Elements of Estafa Established: Respondent, through the Office of the Solicitor General, argued that the prosecution established all elements of estafa under Article 315, paragraph 2(d) through convincing evidence: the checks were issued in payment of an obligation contracted simultaneously with the transactions, the issuer had no sufficient funds, and damage to the payee resulted.
• Simultaneous Issuance: Respondent countered that petitioner issued the subject bank checks as payment for the pieces of jewelry simultaneous to the transactions, on the very same occasion when the jewelry was bought, making the issuance of the checks the principal inducement for Floro to part with the jewelry.
• Ojeda Distinguished: Respondent argued that Ojeda was inapplicable because in that case, the prosecution failed to prove deceit, the accused never assured the payee the checks were funded, the payee knew the checks were issued to guarantee future payments, and the accused fully paid the entire amount of the dishonored checks with an affidavit of desistance. In contrast, petitioner only promised to replace the dishonored checks but never settled her obligations, and notice of dishonor was sufficiently established through formal demands.
• Factual Findings Binding: Respondent maintained that the finding of deceit was a factual issue resolved by both the trial court and the CA, and such factual findings bind the Supreme Court.
• Subsequent Payments Do Not Extinguish Criminal Liability: Respondent argued that any reimbursement or restitution did not extinguish petitioner's criminal liability but only her civil liability pro tanto, as estafa is a public offense prosecuted by the State regardless of reparation.

• Good Faith and Deceit: Whether petitioner acted in good faith, thereby negating malice and deceit in the issuance of the dishonored checks.
• Applicability of People vs. Ojeda: Whether the ruling in People vs. Ojeda applies to petitioner's case to warrant acquittal.
• Effect of Subsequent Payments: Whether petitioner's partial payments and post-judgment remittances extinguish her criminal liability for estafa.
• Timeliness of Defense: Whether the good-faith defense, raised only in a motion for reconsideration before the CA, may be considered by the Supreme Court.

• Good Faith and Deceit: No. Petitioner's defense of good faith was belied by the evidence: she intransigently refused to pay upon demand after the checks were dishonored, and only made remittances after the CA affirmed her conviction and increased the penalty—indicating the spectre of imprisonment, not good faith, motivated the payments.
• Applicability of People vs. Ojeda: No. The factual matrix of Ojeda is materially different: in that case, the accused made extraordinary efforts to fully satisfy her obligations, the private complainant executed an affidavit of desistance confirming full payment, and the prosecution failed to prove notice of dishonor—none of which obtain here.
• Effect of Subsequent Payments: No. Subsequent payments do not obliterate criminal liability already incurred; reimbursement or restitution extinguishes only civil liability pro tanto, as estafa is a public offense that must be prosecuted and punished regardless of reparation.
• Timeliness of Defense: No. An issue raised only in a motion for reconsideration of the appellate court's decision is deemed never raised in that court at all, pursuant to Pascual vs. Ramos.

• Good Faith and Deceit: The essential elements of estafa under Article 315, paragraph 2(d) 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. The prosecution established all three through convincing evidence. The trial court credited Floro's categorical testimony that the checks were issued simultaneously with the purchase of the jewelry, making the issuance the efficient cause of defraudation under the rule in Timbal vs. Court of Appeals: the person to whom the check is delivered would not have parted with the property were it not for the issuance of the check. Good faith negates malice and deceit, but petitioner's conduct belied good faith: she refused to pay upon demand, never offered to arrange a payment scheme until after conviction, and only remitted funds after the CA affirmed the RTC decision and increased the penalty. The fact that nine of 17 checks were honored does not justify acquittal on the charges relative to the dishonored checks. Her good-faith argument was raised only in her motion for reconsideration before the CA, which under Pascual vs. Ramos is treated as if it was never raised at all.

• Applicability of People vs. Ojeda: The CA correctly distinguished Ojeda on multiple grounds. In Ojeda, the accused performed extraordinary efforts to gradually pay and fully settle her obligations, evidenced by an affidavit of desistance from the private complainant declaring full payment; the prosecution also failed to prove that notice of dishonor was sent to and received by the accused. In the present case, petitioner never made a determined and earnest effort to arrange and settle with Floro; she simply promised to pay but never made good on that promise; and formal demands through counsel sufficiently established notice of dishonor. Petitioner herself admitted that the facts of her case are not entirely on all fours with Ojeda.

• Effect of Subsequent Payments: The reimbursement or restitution to the offended party of the sums swindled does not extinguish criminal liability; it extinguishes only civil liability pro tanto. Estafa is a public offense that must be prosecuted and punished by the State on its own motion even though complete reparation has been made. The consent of the private complainant to petitioner's payment of her civil liability pendente lite does not entitle the latter to an acquittal; subsequent payments do not obliterate criminal liability already incurred. Criminal liability for estafa is not affected by a compromise between the parties on civil liability.

• Timeliness of Defense: Under Pascual vs. Ramos, if an issue is raised only in the motion for reconsideration of the appellate court's decision, it is as if it was never raised in that court at all. Petitioner's insistence on good faith and reliance on Ojeda were invoked only in her motion for reconsideration of the CA decision, not during trial or in her initial appeal, and thus cannot be considered.

• Elements of Estafa under Article 315, paragraph 2(d) — The essential elements 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. The failure of the drawer to deposit the amount necessary to cover the check within three days from receipt of notice of dishonor for lack or insufficiency of funds constitutes prima facie evidence of deceit. The Court applied these elements to find that the prosecution established all three through convincing evidence: the checks were issued simultaneously with the jewelry purchases, the accounts were closed, and Floro suffered damage.

• Efficient Cause Doctrine in Estafa — The act of postdating or issuing a check in payment of an obligation must be the efficient cause of the defraudation; it should be either prior to or simultaneous with the act of fraud. The offender must be able to obtain money or property from the offended party by reason of the issuance of the check. The Court relied on this doctrine from Timbal vs. Court of Appeals to confirm that the simultaneous issuance of checks with the jewelry transactions constituted the efficient cause of defraudation.

• Good Faith as Defense to Estafa — Good faith negates malice and deceit and is a valid defense to estafa by postdating a check. It may be manifested by the accused's offering to make arrangements with the creditor as to the manner of payment. However, good faith must be raised and substantiated during trial, not as an afterthought in a motion for reconsideration. The Court found that petitioner's good-faith defense was belied by her intransigent refusal to pay upon demand and her belated remittances only after conviction on appeal.

• Prima Facie Evidence of Deceit — The law provides that prima facie evidence of deceit is established upon proof that the drawer failed to deposit the amount necessary to cover the check within three days from receipt of notice of dishonor. Prima facie evidence need not be rebutted by a preponderance of evidence; evidence that equalizes the weight of the prosecution's evidence or puts the case in equipoise is sufficient. The Court noted that the presumption of deceit operated against petitioner, who failed to rebut it with evidence of equal weight.

• Non-Extinction of Criminal Liability by Payment — Reimbursement or restitution to the offended party does not extinguish criminal liability, only civil liability pro tanto. Estafa is a public offense that must be prosecuted and punished by the State even though complete reparation has been made. Subsequent payments do not obliterate criminal liability already incurred, and a compromise on civil liability does not affect criminal liability.

• "It is criminal fraud or deceit in the issuance of a check which is made punishable under the Revised Penal Code, and not the non-payment of a debt." — This passage distinguishes the criminal offense of estafa from mere civil breach of obligation, clarifying that the penal sanction attaches to the deceit in issuing a worthless check, not to the failure to pay.

• "In order to constitute Estafa under the statutory provisions, the act of postdating or of issuing a check in payment of an obligation must be the efficient cause of the defraudation; accordingly, it should be either prior to or simultaneous with the act of fraud. In fine, the offender must be able to obtain money or property from the offended party by reason of the issuance, whether postdated or not, of the check." — This quotation from Timbal vs. Court of Appeals, adopted by the Court, articulates the efficient-cause requirement: the check issuance must be the inducement that causes the offended party to part with property.

• "The reimbursement or restitution to the offended party of the sums swindled by the petitioner does not extinguish the criminal liability of the latter. It only extinguishes pro tanto the civil liability." — This passage states the rule that post-offense payment does not extinguish criminal liability, a principle central to the rejection of petitioner's good-faith defense based on subsequent payments.

• "There can be no estafa if the accused acted in good faith because good faith negates malice and deceit." — This formulation states the relationship between good faith and the elements of estafa, establishing that good faith is a complete defense if proven, but must be genuine and timely raised.

• People vs. Ojeda, G.R. Nos. 104238-58, June 3, 2004, 430 SCRA 436 — Distinguished. The Court held that Ojeda does not apply because in that case the accused fully settled her obligations with an affidavit of desistance, made extraordinary efforts to pay, and the prosecution failed to prove notice of dishonor—none of which obtain in the present case.
• Timbal vs. Court of Appeals, 423 Phil. 617 (2001) — Followed. The Court relied on its formulation of the efficient-cause doctrine: the issuance of the check must be the efficient cause of defraudation, either prior to or simultaneous with the act of fraud.
• Pascual vs. Ramos, 433 Phil. 449 (2002) — Applied. The Court invoked the rule that an issue raised only in a motion for reconsideration of the appellate court's decision is deemed never raised in that court at all, barring petitioner's belated good-faith defense.
• People vs. Gulion, 402 Phil. 653 (2001) — Cited for the proposition that good faith is a defense to estafa by postdating a check, manifested by offering to make arrangements with the creditor as to the manner of payment.
• Vallarta vs. Court of Appeals, 150 SCRA 336 (1987) — Cited for the principle that the postdating or issuing of a check in payment of an obligation when the offender had no funds is a false pretense or fraudulent act, and that there is no false pretense if a postdated check is issued for a pre-existing obligation.
• Sajot vs. Court of Appeals, 364 Phil. 182 (1999) — Cited for the rule that reimbursement or restitution does not extinguish criminal liability but only civil liability pro tanto.
• People vs. Ladera, 398 Phil. 588 (2002) — Cited for the principle that estafa is a public offense that must be prosecuted and punished by the State even though complete reparation has been made.

• Article 315, paragraph 2(d), Revised Penal Code, as amended by Republic Act No. 4885 — Defines and penalizes estafa committed by postdating or issuing a check in payment of an obligation contracted at the time the check was issued, when the offender had no funds or insufficient funds in the bank. The failure to deposit the amount necessary to cover the check within three days from receipt of notice of dishonor constitutes prima facie evidence of deceit. The Court applied this provision to convict petitioner, finding all three essential elements established by the prosecution.

Chief Justice Artemio V. Panganiban (Chairperson), Associate Justice Consuelo Ynares-Santiago, Associate Justice Ma. Alicia Austria-Martinez, and Associate Justice Minita V. Chico-Nazario concurred in the decision. No separate concurring opinions were noted.

• Unidentified Justice — The text appended after the certification contains a separate opinion arguing for acquittal on the following grounds: (1) under the constitutional presumption of innocence, where two conflicting versions exist—one consistent with guilt and the other with innocence—that which favors the accused should prevail; (2) the petitioner's version—that the checks were issued several days after the jewelry was delivered, not simultaneously—was corroborated by the testimony of a dental aide who affirmed that it was the private complainant who visited petitioner's office in Makati City, whereas the prosecution's version rested on the lone and uncorroborated testimony of the complainant; and (3) the prosecution failed to prove the exact date of the transaction and the exact date of the issuance of the checks, which is of primordial significance in estafa because if the checks were issued even a day or two after the receipt of benefits, the obligation would already be pre-existing and no estafa would lie. The separate opinion relied on Borromeo vs. Court of Appeals (131 SCRA 318), People vs. Clores (125 SCRA 67), and People vs. Bautista (81 Phil. 78) for the proposition that every circumstance against guilt and in favor of innocence must be taken into account. The author of this separate opinion is not identified in the provided text.