Justice  Bellosello, SECOND DIVISION, Cueme v. People, G.R. No. 133325. June 30, 2000

Undaunted, the petitioner is before this court for the reversal of the aforesaid judgments convicting him. Invoking the ruling in Magno vs. CA (210 SCRA 471 [1992]), petitioner maintains that he cannot be convicted for violation of B.P. 22 because several factors militate against a strict application of the mala prohibita doctrine, viz.: (1) the checks were not issued "to apply on account or for value" but as mere warranty deposits to guarantee his obligation in the new partnership; (2) that the profits of the business of the partnership have more than paid his (petitioner's) account for the baking materials he bought, for the payment of which subject checks were issued. 

 As the drawer of the dishonored checks complained of, although intended merely as a guarantee deposit, the petitioner is liable under B.P. Blg 22.

A check issued as an evidence of debt, though not intended for encashment, has the same effect like any other check. It is within the contemplation of B.P. 22, which is explicit that "any person who makes or draws and issues any check to apply for an account or for value, knowing at the time of issue that he does not have sufficient funds in or credit with the drawee bank . . . which check is subsequently dishonored . . . shall be punished by imprisonment . . ." (Cruz vs. CA, 233 SCRA 307 [1994])

When a check is presented for payment, the drawee bank normally honors the same whether issued in payment of an obligation or just as a guaranty of an obligation.

What is penalized by law is the issuance of a bouncing check. The mere act of issuing an unfunded check is a malum prohibitum. (ibid., p. 301)

In Que vs. People, 154 SCRA 160, the court ruled:

"It is now settled that Batas Pambansa Bilang 22 applies even in cases where dishonored checks are issued merely in the form of a deposit or a guarantee. The enactment in question does not make any distinction as to whether the checks within its contemplation are issued in payment of an obligation or merely to guarantee the said obligation. In accordance with the pertinent rule of statutory construction, inasmuch as the law has not made any distinction in this regard, no such distinction can be made by means of interpretation or application. Furthermore, the history of the enactment of subject statute evinces the definite legislative intent to make the prohibition all-embracing, without making any exception from the operation thereof in favor of a guarantee. . . .

Consequently, what are important are the facts that the accused had deliberately issued the checks in question to cover accounts and that the checks were dishonored upon presentment regardless of whether or not the accused merely issued the checks as a guarantee."  

and in People vs. Nitafan, 215 SCRA 84, ratiocinated:

"We are not unaware that a memorandum check may carry with it the understanding that it is not to be presented at the bank but will be redeemed by the maker himself when the loan falls due. The understanding may be manifested by writing across the check 'Memorandum', 'Memo' or 'Mem'. However, with the promulgation of B.P. 22, such understanding or private arrangement may no longer prevail to exempt it from penal sanction imposed by the law. To require that the agreement surrounding the issuance of checks be first looked into and thereafter exempt such issuance from the punitive provisions of B.P. 22 on the basis of such agreement or understanding would frustrate the very purpose for which the law was enacted — to stem the proliferation of unfunded checks. . . ." (G.R. No. 116566, CA Decision dated December 29, 1993, Rollo, pp. 52-53)

The importance of arresting the proliferation of bouncing checks can not be overemphasized. The mischief of circulating unfunded checks is injurious not only to the payee or holder of such checks but to society in general, and the business community, in particular. The nefarious practice "can very well pollute the channels of trade and commerce, injure the banking system and eventually hurt the welfare of society and the public interest." (Cruz vs. CA, supra, p. 308)

Petitioner's stance that the complainant tried to enrich herself unjustly by collecting on already paid checks is anemic of evidentiary support. No evidence of any weight whatsoever was introduced to show a set-off or compensation of the monetary obligations for which the checks in question were issued. It has been established indubitably that the petitioner had drawn and issued the said checks in favor of the complainant as payment of the flour and other baking materials the former bought from the latter. When such checks were deposited, they were all dishonored and returned by the drawee bank for the reason "Account Closed." (TSN, pp. 22-24, July 6, 1994)

The straightforward testimony of the complainant that she agreed with petitioner to redate the same checks, after he pleaded for an extension of time for the payment thereof, is worthy of belief. Had the indebtedness covered by the checks sued upon been paid, the petitioner would have redeemed or taken the checks back in the ordinary course of business. (Section 3 [q] Rule 131, Revised Rules of Court of the Philippines) But the same checks remained in the possession of the complainant who asked for the satisfaction of the obligations involved when said checks became due without the petitioner heeding the demand for him to redeem his checks which bounced.   

Petitioner's reliance on the ruling in the case of Magno vs. Court of Appeals (supra) is misplaced. In said case the accused, who was in the process of putting up a car repair shop, was provided with credit facilities by LS Finance and Management Corporation (LS Finance) to enable him to lease from MANCOR the needed equipments. As part of their arrangement, LS Finance required a 30% warranty deposit of the "purchase/lease" value of the equipments to be transacted upon, and the accused subsequently issued checks to collateralize an accommodation made by Corazon Teng (Vice President of MANCOR) amounting to Twenty Nine Thousand Seven Hundred (P29,700.00) Pesos as warranty deposit but the said checks bounced. Found guilty under B.P. Blg. 22, the court stressed, on appeal, that the "cash out" made by Mrs. Teng was not used by the accused who was just paying rental on the equipments. To charge him for the refund of a "warranty deposit" he did not withdraw because it was not his own account and it remained with LS Finance, would be to make him pay an unjust "debt", to say the least, since he did not actually receive the amount involved.

In the present case, the petitioner issued the bouncing checks in question to cover the receipt of an actual "account or for value". The checks were issued to pay for the flour and other baking materials which he purchased from the complainant.

THIRD DIVISION, Justice Purisima, DOMINGO DICO, JR., petitioner, vs. COURT OF APPEALS and PEOPLE OF THE PHILIPPINES, respondents, [G.R. Nos. 116566 & 120149.  April  14, 1999.]

A memorandum check is in the form of an ordinary check, with the word "memorandum", "memo" or "mem" written across its face, signifying that the maker or drawer engages to pay the bona fide holder absolutely, without any condition concerning its presentment. 6 Such a check is an evidence of debt against the drawer, and although may not be intended to be presented, 7 has the same effect as an ordinary check, 8 and if passed to a third person, will be valid in his hands like any other check. 9

From the above definition, it is clear that a memorandum check, which is in the form of an ordinary check, is still drawn on a bank and should therefore be distinguished from a promissory note, which is but a mere promise to pay. If private respondent seeks to equate memorandum check with promissory note, as he does, to skirt the provisions of B.P. 22, he could very well have issued a promissory note, and this would have exempted him from the coverage of the law. In the business community, a promissory note, certainly, has less impact and persuadability than a check.

Verily, a memorandum check comes within the meaning of Sec. 185 of the Negotiable Instruments Law which defines a check as "a bill of exchange drawn on a bank payable on demand." A check is also defined as "[a] written order or request to a bank or persons carrying on the business of banking, by a party having money in their hands, desiring them to pay, on presentment, to a person therein named or bearer, or to such person or order, a named sum of money," citing 2 Dan. Neg. Inst. 528; Blair v. Wilson, 28 Gratt. (Va.) 170; Deener v. Brown, 1 MacArth. (D.C.) 350; In re Brown, 2 Sto. 502, Fed. Cas. No. 1,985. See Chapman v. White, 6 N.Y. 412, 57 Am. Dec. 464.  10 Another definition of check is that it is "[a] draft drawn upon a bank and payable on demand, signed by the maker or drawer, containing an unconditional promise to pay a sum certain in money to the order of the payee," citing State v. Perrigoue, 81 Wash. 2d 640, 503 p. 2d 1063, 1066.  11.      Black's Law Dictionary, Fifth Ed., St. Paul, Minn., West Publishing Co., p. 215.

A memorandum check must therefore fall within the ambit of B.P. 22 which does not distinguish but merely provides that "[a]ny person who makes or draws and issues any check knowing at the time of issue that he does not have sufficient funds in or credit with the drawee bank . . . which check is subsequently dishonored . . . shall be punished by imprisonment . . ." (emphasis supplied).  12.      Sec. 1, B.P. 22. Ubi lex non distinguit nec nos distinguere debemus.

But even if We retrace the enactment of the "Bouncing Check Law" to determine the parameters of the concept of "check", We can easily glean that the members of the then Batasang Pambansa intended it to be comprehensive as to include all checks drawn against banks. This was particularly the ratiocination of Mr. Estelito P. Mendoza, co-sponsor of Cabinet Bill No. 9 which later became B.P. 22, when in response to the interpellation of Mr. Januario T. Seño, Mr. Mendoza explained that the draft or order must be addressed to a bank or depository,  [13 Journal No. 70, December 4, 1978, p. 259, Batasan Record, First Regular Session, 1978-1979] and accepted the proposed amendment of Messrs. Antonino P. Roman and Arturo M. Tolentino that the words "draft or order", and certain terms which technically meant promissory notes, wherever they were found in the text of the bill, should be deleted since the bill was mainly directed against the pernicious practice of issuing checks with insufficient or no funds, and not to drafts which were not drawn against

banks.  14. Journal No. 72, December 6, 1978, p. 270, Batasan Record, First Regular Session, 1978-1979.

A memorandum check, upon presentment, is generally accepted by the bank. Hence, it does not matter whether the check issued is in the nature of a memorandum as evidence of indebtedness or whether it was issued in partial fulfillment of a pre-existing obligation, for what the law punishes is the issuance itself of a bouncing check  15 15.      See People v. Veridiano II, G. R. No. 62243, October 12, 1984; 132 SCRA 523. and not the purpose for which it was issued nor the terms and conditions relating to its issuance. The mere act of issuing a worthless check, whether as a deposit, as a guarantee, or even as an evidence of a pre-existing debt, is malum prohibitum.  [16.      See Que v. People, G. R. Nos. 75217-18, September 21, 1987; 154 SCRA 160.]

We are not unaware that a memorandum check may carry with it the understanding that it is not to be presented at the bank but will be redeemed by the maker himself when the loan falls due. This understanding may be manifested by writing across the check "Memorandum", "Memo" or "Mem". However, with the promulgation of B.P. 22, such understanding or private arrangement may no longer prevail to exempt it from penal sanction imposed by the law. To require that the agreement surrounding the issuance of checks be first looked into and thereafter exempt such issuance from the punitive provisions of B.P. 22 on the basis of such agreement or understanding would frustrate the very purpose for which the law was enacted — to stem the proliferation of unfunded checks. After having effectively reduced the incidence of worthless checks changing hands, the country will once again experience the limitless circulation of bouncing checks in the guise of memorandum checks if such checks will be considered exempt from the operation of B.P. 22. It is common practice in commercial transactions to require debtors to issue checks on which creditors must rely as guarantee of payment, or as evidence of indebtedness, if not as mode of payment. To determine the reasons for which checks are issued, or the terms and conditions for their issuance, will greatly erode the faith the public reposes in the stability and commercial value of checks as currency substitutes, and bring about havoc in trade and in banking communities.  17. Lozano v. Martinez, supra.

WHEREFORE, the petition is GRANTED and the Order of respondent Judge of 1 September 1986 is SET ASIDE. Consequently respondent Judge, or whoever presides over the Regional Trial Court of Manila, Branch 52, is hereby directed forthwith to proceed with the hearing of the case until terminated.

EN BANC, Justice Bellosillo, PEOPLE OF THE PHILIPPINES, petitioner, vs. HON. DAVID G. NITAFAN, Presiding Judge, Regional Trial Court, Branch 52, Manila, and K.T. LIM alias MARIANO LIM, respondents, [G.R. No. 75954.  October 22, 1992.]

The argument on petitioner's second issue has likewise no leg to stand on. On this argument that he issued the checks in question merely to guarantee the payment of the purchases by Powerhouse Supply, Inc. of which he is the Manager, We give our stamp of approval on the findings of the appellate court, to wit:

"Neither may appellant's claim in his second assignment of error that the accused issued the checks in question merely to guarantee the payment of the purchases by Powerhouse Supply, Inc. serve to exculpate accused from criminal liability for his act of issuing the checks in question.

"It is now settled that Batas Pambansa Bilang 22 applies even in cases where dishonored checks are issued merely in the form of a deposit or a guarantee. The enactment in question does not make any distinction as to whether the checks within its contemplation are issued in payment of an obligation or merely to guarantee the said obligation. In accordance with the pertinent rule of statutory construction, inasmuch as the law has not made any distinction in this regard, no such distinction can be made by means of interpretation or application. Furthermore, the history of the enactment of subject statute evinces the definite legislative intent to make the prohibition all-embracing without making any exception from the operation thereof in favor of a guarantee. This intent may be gathered from the statement of the sponsor of the bill (Cabinet Bill No. 9) which was enacted later into Batas Pambansa Bilang 22, when it was introduced before the Batasan Pambansa, that the bill was introduced to discourage the issuance of bouncing checks, to prevent checks from becoming "useless scraps of paper" and to restore respectability to checks, all without distinction as to the purpose of the issuance of the checks. The legislative intent as above said is made all the more clear when it is considered that while the original text of Cabinet Bill No. 9, supra, had contained a proviso excluding from the coverage of the law a check issued as a mere guarantee, the final version of the bill as approved and enacted by the Committee on the Revision of Laws in the Batasan deleted the abovementioned qualifying proviso deliberately for the purpose of making the enforcement of the act more effective (Batasan Record) First Regular Session, December 4, 1978, Volume II, pp. 1035-1036)

"Consequently, what are important are the facts that the accused had deliberately issued the checks in question to cover accounts and that the checks were dishonored upon presentment regardless of whether or not the accused merely issued the checks as a guarantee." (pp. 4-5. Dec. IAC) (pp. 37-38, Rollo)

From the aforequoted paragraphs, it is clear that it is the intention of the framers of Batas Pambansa Bilang 22 to make the mere act of issuing a worthless check malum prohibitum and thus punishable under such law.

Justice Paras, SECOND DIVISION, VICTOR QUE, petitioner, vs. PEOPLE OF THE PHILIPPINES and INTERMEDIATE APPELLATE COURT, respondents, [G.R. Nos. 75217-18.  September 21, 1987.]