Rigor vs. People of the Philippines

The gravamen of the offense under Batas Pambansa Blg. 22 is the act of making and issuing a worthless check or a check that is dishonored upon its presentation for payment, not the non-payment of an obligation. The law punishes the act as an offense against public order, and the payee's knowledge of the drawer's insufficient funds does not negate criminal liability since deceit is not an essential element of the offense.

Petitioner Alfredo Rigor obtained a commercial loan of P500,000 from the Rural Bank of San Juan, Inc. (RBSJ), a rural bank located in San Juan, Metro Manila. The loan transaction was unusual in that it was approved and released on the same day, owing to petitioner's personal relationship with the bank's president, being his "kumpare," and his familiarity with the bank's directors, all of whom came from Tarlac. The prosecution of violations of Batas Pambansa Blg. 22 is governed by the Bouncing Checks Law, which penalizes the issuance of checks without sufficient funds.

On November 16, 1989, petitioner Alfredo Rigor applied for a commercial loan of P500,000 from the Rural Bank of San Juan, Inc. (RBSJ) at its branch along N. Domingo St., San Juan, Metro Manila. He signed a promissory note stipulating 24% interest per annum, and the loan was approved by Bank Manager Melquecedes de Guzman and Controller Agustin Uy. A cashier's check for P487,000, representing the net proceeds of the loan, was issued to petitioner, who endorsed and encashed it with RBSJ Teller Eleneth Cruz. After receiving the proceeds, petitioner issued an undated Associated Bank Check No. 165476, Tarlac Branch, in the amount of P500,000, payable to RBSJ.

The loan transaction was exceptional because it was not bank policy for a borrower to apply for a loan, obtain its approval, and receive its proceeds on the same day. Petitioner's case was special because he was the "kumpare" of the RBSJ President and was well-known to all the bank's directors, as he, like them, came from Tarlac.

Petitioner failed to pay his loan upon its maturity on December 16, 1989. He personally asked de Guzman for a two-month extension and advised RBSJ to date his Associated Bank check to February 16, 1990. When he failed to pay again, he requested another two-month extension up to April 16, 1990, which de Guzman also granted. On April 16, 1990, petitioner still failed to pay. Basangan and his co-employee Carlos Garcia went to Tarlac to collect, and petitioner's written request for another 30-day extension was denied by de Guzman, who instead sent him a formal demand letter dated April 25, 1990.

On May 25, 1990, Associated Bank check no. 165476 was deposited with PS Bank, San Juan Branch, and was returned with the words "closed account" stamped on its face. Associated Bank employee Esteban Pasion declared that petitioner's Current Account No. 1022-001197-9 with Associated Bank had been closed since February 2, 1990. Petitioner's balance under the bank's statement of account as of November 16, 1989 was only P859, and the most he ever had on his account was P40,000 recorded on November 19, 1989. Basangan and Garcia advised petitioner of the dishonor of his check in Tarlac. Petitioner wrote Atty. Joselito Lim, RBSJ Chairman of the Board, about the loan and payment arrangements; the letter was referred to de Guzman, who sent another demand letter dated September 17, 1990 through registered mail, informing petitioner of the dishonor and requiring early settlement. Petitioner still refused to pay.

Petitioner denied the charge, claiming that on November 16, 1989, Agapito Uy and his sister Agnes Angeles proposed that he secure a loan from RBSJ for P500,000, of which P200,000 would be for him and P300,000 would go to Uy and his sister to pay unpaid loans of borrowers in their "side banking" activities. Uy told him he could put up his four-door Mercedes Benz as collateral for the P200,000 loan, while the P300,000 would have no collateral. Petitioner agreed, signed a blank loan application form, a promissory note, and a chattel mortgage for his Mercedes Benz. He was given two Premiere Bank checks worth P100,000 each, which he gave to his brother and sister-in-law for encashment in Tarlac. He issued to Uy a personal check for P500,000 undated, which was deposited in the bank for encashment in late May 1990 but bounced. When demand was made for him to pay, he told Uy to get his Mercedes Benz as payment for P200,000, but Uy refused and wanted him to pay the whole P500,000.

The trial court found that petitioner admitted having issued the check, that his highest outstanding balance in November 1989 was only about P40,000, and that he knowingly issued the check without sufficient funds. The trial court also noted that the defense that petitioner secured only P200,000 was of no moment since he admitted issuing the P500,000 check, which was dishonored for "account closed."

• Lack of Knowledge Element: Petitioner contended that he did not violate Batas Pambansa Bilang 22 because he told the officers of the complainant bank from the very beginning that he did not have sufficient funds in the bank, and the absence of the element of knowingly issuing a worthless check entitles him to acquittal.
• Lack of Notice of Dishonor: Petitioner argued that without proof that he actually received a notice of dishonor, a prosecution for violation of the Bouncing Checks Law cannot prosper.
• Lack of Jurisdiction: Petitioner contended that the Pasig court had no jurisdiction to try and decide the case since no proof was offered that his check was issued, delivered, dishonored, or that knowledge of insufficiency of funds occurred in the Municipality of San Juan, Metro Manila.
• Enticement and Side Agreement: Petitioner argued that he was merely enticed by Agustin Uy, the bank's managing director and comptroller, to obtain the loan where he received only P200,000 while Uy took P300,000, and his check was partly used to collateralize an accommodation in favor of Uy.

• Elements of the Offense Present: The prosecution established that petitioner applied for a loan of P500,000, issued an undated Associated Bank Check No. 165476 worth P500,000 payable to RBSJ in connection with the loan, and that the check was later dated February 16, 1990, showing the presence of the first element of the offense.
• Knowledge Established by Admission: The prosecution argued that petitioner's admission of the insufficiency of his funds at the time he issued the check constitutes the very element of "knowledge" contemplated in Section 1 of BP 22, and that an actually admitted knowledge of a fact needs no presumption.
• Notice of Dishonor Proven: The prosecution presented evidence that Basangan and Garcia personally informed petitioner of the dishonor in Tarlac, and that a demand letter dated September 17, 1990 was sent through registered mail, with petitioner admitting knowledge of the dishonor through the demand letter.

• Knowledge Element: Whether the absence of the element of knowingly issuing a worthless check entitles the petitioner to acquittal.
• Notice of Dishonor: Whether the prosecution for violation of the Bouncing Checks Law can prosper without proof that the accused actually received a notice of dishonor.
• Jurisdiction: Whether the Regional Trial Court of Pasig had jurisdiction to try and decide the case for violation of Batas Pambansa Bilang 22.

• Knowledge Element: No. All elements of the offense under Section 1 of Batas Pambansa Bilang 22 were present, and petitioner's admission of his insufficient funds at the time of issuance constituted the element of knowledge. The payee's knowledge of insufficiency of funds is immaterial because deceit is not an essential element of the offense.
• Notice of Dishonor: No. The notice of dishonor was sufficiently established through the testimony of prosecution witness Basangan that he and Garcia personally informed petitioner of the dishonor, and through the demand letter dated September 17, 1990 sent via registered mail, which petitioner admitted receiving.
• Jurisdiction: No. Violations of Batas Pambansa Bilang 22 are transitory or continuing crimes, and since the check was issued and delivered at the Rural Bank of San Juan, Metro Manila, and subsequently deposited with PS Bank, San Juan Branch, the RTC of Pasig had jurisdiction to try the case.

• Knowledge Element: The Court applied the elements of the offense under Section 1 of Batas Pambansa Bilang 22: (1) making, drawing, and issuance of any check to apply on 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 the payment of the check in full upon its presentment; and (3) subsequent dishonor of the check by the drawee bank for insufficiency of funds or credit. The evidence showed that petitioner applied for a loan of P500,000 and on the same day issued an undated Associated Bank Check No. 165476 worth P500,000 payable to RBSJ, which was later dated February 16, 1990, establishing the first element. The second element was shown by petitioner's admission that he knew of the insufficiency of his funds when he issued the check. The Court of Appeals correctly ruled that while the prima facie presumption of knowledge under Section 2 of BP 22 did not apply because the check was presented beyond the 90-day period, the presumption was supplanted by petitioner's own admission. The Court held that assuming the payee had knowledge of the insufficiency of funds, such knowledge is immaterial since deceit is not an essential element of the offense. The gravamen of the offense is the issuance of a bad check, and malice and intent in the issuance thereof are inconsequential. The Court distinguished the cited case of Magno vs. Court of Appeals, which involved a "warranty deposit" scheme where the accused did not receive the amount in question, from the present case which involved an ordinary loan transaction where petitioner issued the check to be applied to the payment of his loan. Citing Lozano vs. Martinez, the Court stated that the gravamen of the offense is the act of making and issuing a worthless check, and the law punishes the act not as an offense against property but as an offense against public order. The third element was shown by the fact that after the check was deposited for encashment, it was dishonored by Associated Bank for reason of "closed account" as evidenced by its Check Return Slip.

• Notice of Dishonor: The Court held that the notice of dishonor of a check may be sent to the drawer or maker by the drawee bank, the holder of the check, or the offended party either by personal delivery or by registered mail, and must be in writing. In this case, prosecution witness Edmarcos Basangan testified that after the check was dishonored, he and co-employee Carlos Garcia went to petitioner's residence in Tarlac to inform him about it. Thereafter, petitioner wrote a letter dated June 28, 1990 to Atty. Joselito Lim, RBSJ Chairman of the Board, proposing a manner of paying the loan. The letter was referred to the bank manager who sent petitioner another demand letter dated September 17, 1990 through registered mail, which informed petitioner of the dishonor of his check for the reason of account closed and required him to settle his obligation. The transcript of records showed that petitioner admitted knowledge of the dishonor of his check through a demand letter sent to him, and therefore he cannot pretend that he did not receive a notice of dishonor.

• Jurisdiction: The Court applied Section 15, paragraph (a), of Rule 110 of the 2000 Revised Rules of Criminal Procedure, which provides that the criminal action shall be instituted and tried in the court of the municipality or territory where the offense was committed or where any of its essential ingredients occurred. Violations of Batas Pambansa Bilang 22 are categorized as transitory or continuing crimes, and in such crimes, some acts material and essential to the crimes and requisite to their consummation occur in one municipality or territory and some in another, in which event, the court of either has jurisdiction to try the cases. The evidence clearly showed that the undated check was issued and delivered at the Rural Bank of San Juan, Metro Manila on November 16, 1989, and subsequently the check was dated February 16, 1990 thereat. On May 25, 1990, the check was deposited with PS Bank, San Juan Branch, Metro Manila. The Court of Appeals correctly ruled that the information at bar effectively charges San Juan as the place of drawing and issuing, and since the place of issue and delivery was San Juan and knowledge, as an essential part of the offense, was also overtly manifested in San Juan, both allegation and proof sufficiently vested jurisdiction upon the RTC in Pasig City.

• Gravamen of the offense under BP 22 — The gravamen of the offense punished by Batas Pambansa Blg. 22 is the act of making and issuing a worthless check or a check that is dishonored upon its presentation for payment. It is not the non-payment of an obligation which the law punishes. The law is not intended or designed to coerce a debtor to pay his debt; rather, the thrust of the law is to prohibit, under pain of penal sanctions, the making of worthless checks and putting them in circulation. The law punishes the act not as an offense against property, but as an offense against public order. The Court applied this doctrine to reject petitioner's defense that the payee knew of his insufficient funds, holding that deceit is not an essential element of the offense.

• Knowledge of insufficiency of funds — Knowledge involves a state of mind difficult to establish. The prima facie presumption of knowledge under Section 2 of BP 22 does not apply when the check is presented beyond the 90-day period from its due date, but the presumption may be supplanted by the drawer's own admission that he did not hide the fact that he had no sufficient funds for the check. An actually admitted knowledge of a fact needs no presumption. The Court applied this doctrine where petitioner admitted knowing of the insufficiency of his funds when he issued the check, and where his current account was already closed two weeks before he authorized RBSJ to date his check.

• Transitory or continuing crimes — Violations of Batas Pambansa Bilang 22 are categorized as transitory or continuing crimes. In such crimes, some acts material and essential to the crimes and requisite to their consummation occur in one municipality or territory and some in another, in which event, the court of either has jurisdiction to try the cases, it being understood that the first court taking cognizance of the case excludes the other. A person charged with a transitory crime may be validly tried in any municipality or territory where the offense was in part committed. The Court applied this doctrine to uphold the jurisdiction of the RTC of Pasig, since the check was issued and delivered in San Juan, Metro Manila.

• "The gravamen of the offense punished by BP 22 is the act of making and issuing a worthless check or a check that is dishonored upon its presentation for payment. It is not the non-payment of an obligation which the law punishes. The law is not intended or designed to coerce a debtor to pay his debt. The thrust of the law is to prohibit, under pain of penal sanctions, the making of worthless checks and putting them in circulation. Because of its deleterious effects on the public interest, the practice is proscribed by the law. The law punishes the act not as an offense against property, but an offense against public order." — This passage from Lozano v. Martinez, quoted by the Court, articulates the canonical formulation of the gravamen of the offense under BP 22 and is central to the Court's rejection of petitioner's defenses.

• "Knowledge involves a state of mind difficult to establish. We hold that appellant's admission of the insufficiency of his fund at the time he issued the check constitutes the very element of 'knowledge' contemplated in Sec. 1 of BP 22. The prima facie presumption of knowledge required in Sec. 2, Ibid., does not apply because (a) the check was presented for payment only on May 25, 1990 or beyond the 90-day period, which expired on May 16, 1990, counted from the maturity date of the check on February 16, 1990 and (b) an actually admitted knowledge of a fact needs no presumption." — This passage from the Court of Appeals' ruling, adopted by the Supreme Court, defines how the knowledge element may be established through the drawer's admission even when the statutory presumption does not apply.

• "Assuming arguendo that the payee had knowledge that he had insufficient funds at the time he issued the check, such knowledge by the payee is immaterial as deceit is not an essential element of the offense under Batas Pambansa Bilang 22. The gravamen of the offense is the issuance of a bad check; hence, malice and intent in the issuance thereof are inconsequential." — This passage states the Court's holding that the payee's knowledge of the drawer's insufficient funds does not negate criminal liability under BP 22.

• Vaca vs. Court of Appeals, 298 SCRA 656 (1998) — Cited as the source of the elements of the offense under Section 1 of Batas Pambansa Bilang 22, which the Court applied to the facts of the case.
• Navarro vs. Court of Appeals, 234 SCRA 639 (1994) — Cited together with Vaca as authority for the elements of the offense under BP 22.
• Magno vs. Court of Appeals, 210 SCRA 471 (1992) — Distinguished by the Court as inapplicable because it involved a "warranty deposit" scheme in a lease contract where the accused did not receive the amount in question, unlike the present case which involved an ordinary loan transaction.
• Lozano vs. Martinez, 146 SCRA 323 (1986) — Quoted for the doctrine that the gravamen of the offense under BP 22 is the act of making and issuing a worthless check, and that the law punishes the act as an offense against public order.
• People vs. Nitafan, 215 SCRA 79 (1992) — Cited for the proposition that requiring the agreement surrounding the issuance of checks to be first looked into would frustrate the very purpose of BP 22.
• Cruz vs. Court of Appeals, 233 SCRA 301 (1994) — Cited for the proposition that the payee's knowledge of insufficient funds is immaterial since deceit is not an essential element of the offense under BP 22.
• Ibasco vs. Court of Appeals, 261 SCRA 449 (1996) — Cited in distinguishing Magno, noting the different facts of that case.
• Sia vs. People of the Philippines, G.R. No. 149695, April 28, 2004 — Cited for the rule that the notice of dishonor may be sent to the drawer or maker by the drawee bank, the holder of the check, or the offended party either by personal delivery or by registered mail, and must be in writing.
• Lim vs. Court of Appeals, 251 SCRA 408 (1995) — Cited for the doctrine that violations of BP 22 are transitory or continuing crimes, and that a person charged with a transitory crime may be validly tried in any municipality or territory where the offense was in part committed.
• Ngo vs. People of the Philippines, G.R. No. 155815, July 14, 2004 — Cited in support of the finding that the check was issued to apply for value.

• Section 1, Batas Pambansa Blg. 22 — The Bouncing Checks Law, which defines and penalizes the issuance of checks without sufficient funds. The Court applied its elements to the facts and found all three elements present: issuance of the check for value, knowledge of insufficiency of funds, and subsequent dishonor.
• Section 2, Batas Pambansa Blg. 22 — The provision creating the prima facie presumption of knowledge of insufficiency of funds. The Court noted that this presumption did not apply because the check was presented beyond the 90-day period, but the presumption was supplanted by petitioner's own admission.
• Section 15, paragraph (a), Rule 110, 2000 Revised Rules of Criminal Procedure — The provision on the place where a criminal action is to be instituted, which provides that the action shall be instituted and tried in the court of the municipality or territory where the offense was committed or where any of its essential ingredients occurred. The Court applied this to uphold the jurisdiction of the RTC of Pasig over the transitory crime.

Davide, Jr., C.J. (Chairman), Quisumbing, Ynares-Santiago, and Carpio, JJ., concurred.