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PRESUMPTION OF KNOWLEDGE

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In this appeal, petitioner argues that she never knew Seguan and much more, had any “transaction” with her. According to petitioner, she issued the two checks and gave them to Aurelia Nadera, not to Seguan. She gave the two checks to Aurelia Nadera from whom she got two sets of jewelry, as a “security arrangement” or “guarantee” that she would return the jewelry received if she would not be able to sell them.¹⁶ [Rollo, p. 13.]

The appeal has no merit.

The elements of B.P. Blg. 22 are:¹⁷ [Francisco T. Sycip, Jr. v. Court of Appeals, G.R. No. 125059, March 17, 2000.]

“(1) The making, drawing and issuance of any check to apply for account or for value;

“(2) The 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 such check in full upon its presentment; and

“(3) The 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.”

Petitioner never denied issuing the two checks. She argued that the checks were not issued to Seguan and that they had no pre-existing transaction. The checks were issued to Aurelia Nadera as mere guarantee and as a security arrangement to cover the value of jewelry she was to sell on consignment basis.¹⁸ [Rollo, p. 13.] These defenses cannot save the day for her. The first and last elements of the offense are admittedly present. To escape liability, she must prove that the second element was absent, that is, at the time of issue of the checks, she did not know that her funds in the bank account were insufficient. She did not prove this.

B.P. No. 22, Section 2 creates a presumption juris tantum that the second element prima facie exists when the first an third elements of the offense are present.¹⁹ [B.P. 22, Section 2 provides, “Sec. 2 Evidence of knowledge of insufficient funds – The making, drawing and issuance of a check payment of which is refused by the drawee because of insufficient funds in or credit with such bank, when presented within ninety (90) days from the date of the check, shall be prima facie evidence of Knowledge of such insufficiency of funds or credit unless such maker or drawer pays the holder thereof the amount due thereon, or makes arrangements for payment in full by the drawee of such check within five (5) banking days after receiving notice that such check has not been paid by the drawee.] If not rebutted, it suffices to sustain a conviction.²⁰ [Francisco T. Sycip, Jr. v. Court of Appeals, supra, Note 17.]

The gravamen of B.P. No. 22 is the act of making and issuing a worthless check or one that is dishonored upon its presentment for payment. And the accused failed to satisfy the amount of the check or make arrangement for its payment within five (5) banking days from notice of dishonor.²¹ [King v. People, G.R. No. 131540, December 2, 1999.] The act is malum prohibitum, pernicious and inimical to public welfare.²² [Francisco T. Sycip, Jr. v. Court of Appeals, supra, Note 17.] Laws are created to achieve a goal intended and to guide and prevent against an evil or mischief.²³ Codoy v. Calugay, 312 SCRA 333, 351 (1999).] Why and to whom the check was issued is irrelevant in determining culpability. The terms and conditions surrounding the issuance of the checks are also irrelevant.²⁴ [Llamado v. Court of Appeals, 270 SCRA 423 (1997).]

Unlike in estafa,²⁵ [People v. Hernando, G.R. No. 125214, October 28, 1999.] under B. P. No. 22, one need not prove that the check was issued in payment of an obligation, or that there was damage. The damage done is to the banking system.²⁶ [Vaca v. Court of Appeals, 298 SCRA 658 (1998).]

In United States v. Go Chico, we ruled that in acts mala prohibita, the only inquiry is, “has the law been violated?” When dealing with acts mala prohibita²⁷ [United States v. Go Chico, 14 Phil. 128, 131 (1909).]--

“… it is not necessary that the appellant should have acted with criminal intent. In many crimes, made such by statutory enactment, the intention of the person who commits the crime is entirely immaterial. This is necessarily so. If it were not, the statute as a deterrent influence would be substantially worthless. It would be impossible of execution. In many cases, the act complained of is itself that which produces the pernicious effect the statute seeks to avoid. In those cases the pernicious effect is produced with precisely the same force and result whether the intention of the person performing the act is good or bad.”

This case is a perfect example of an act mala prohibita. Petitioner issued two checks. They were dishonored upon presentment for payment due to the fact that the account was closed. Petitioner failed to rebut the presumption that she knew her funds were insufficient at the time of issue of the checks. And she failed to pay the amount of the checks or make arrangement for its payment within five (5) banking days from receipt of notice of dishonor. B.P. No. 22 was clearly violated. Hoc quidem per quam durum est sed ita lex scripta est. The law may be exceedingly hard but so the law is written.

En Banc, Justice Pardo, ROSA LIM, petitioner, vs., PEOPLE OF THE PHILIPPINES, respondent, [G.R. No. 130038. September 18, 2000]

Added to these is the presumption of knowledge of insufficiency of funds. A maker’s knowledge is presumed from the dishonor of his check for insufficiency of funds.37 [Vaca v. Court of Appeals, G.R. No. 131714, 16 November 1998, 298 SCRA 656.] Once proved that the maker or drawer had knowledge of the insufficiency of his funds or credit, which is also an important element for the offense to exist, he is rendered ipso facto liable.

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

Knowledge of Insufficiency of Funds

To hold a person liable under BP 22, it is not enough to establish that a check issued was subsequently dishonored. It must be shown further that the person who issued the check knew "at the time of issue that that he does not have sufficient funds in or credit with the drawee bank for the payment of such check in full upon its presentment." Because this element involves a state of mind which is difficult to establish, Section 2 of the law creates a prima facie presumption of such knowledge, as follows:21 [See also Crisologo-Jose v. Court of Appeals, 177 SCRA 594, September 15, 1989; Travel-On, Inc. v. Court of Appeals, 210 SCRA 351, June 26, 1992 and People v. Singson, 215 SCRA 534, November 12, 1992.]

"Sec. 2. Evidence of knowledge of insufficient funds. --- The making, drawing and issuance of a check payment of which is refused by the drawee because of insufficient funds in or credit with such bank, when presented within ninety (90) days from the date of the check, shall be prima facie evidence of knowledge of such insufficiency of funds or credit unless such maker or drawer pays the holder thereof the amount due thereon, or makes arrangements for payment in full by the drawee of such check within five (5) banking days after receiving notice that such check has not been paid by the drawee."

In other words, the prima facie presumption arises when a check is issued. But the law also provides that the presumption does not arise when the issuer pays the amount of the check or makes arrangement for its payment "within five banking days after receiving notice that such check has not been paid by the drawee." Verily, BP 22 gives the accused an opportunity to satisfy the amount indicated in the check and thus avert prosecution. As the Court held in Lozano v. Martinez, the aforecited provision serves to "mitigate the harshness of the law in its application."22 [146 SCRA 324, December 18, 1986, per Yap, CJ.] This opportunity, however, can be used only upon receipt by the accused of a notice of dishonor. This point was underscored by the Court in Lina Lim Lao v. Court of Appeals:23 [274 SCRA 572, 594, June 20, 1997, per Panganiban, J. Citations omitted.]

"It has been observed that the State, under this statute, actually offers the violator ‘a compromise by allowing him to perform some act which operates to preempt the criminal action, and if he opts to perform it the action is abated.’ This was also compared ‘to certain laws allowing illegal possessors of firearms a certain period of time to surrender the illegally possessed firearms to the Government, without incurring any criminal liability.’ In this light, the full payment of the amount appearing in the check within five banking days from notice of dishonor is a ‘complete defense.’ 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. Petitioner has a right to demand – and the basic postulates of fairness require -- that the notice of dishonor be actually sent to and received by her to afford her the opportunity to avert prosecution under BP 22."

Thus, in order to create the prima facie presumption that the issuer knew of the insufficiency of funds, it must be shown that he or she received a notice of dishonor and, within five banking days thereafter, failed to satisfy the amount of the check or make arrangement for its payment.

To prove that petitioner knew of the insufficiency of her funds, the prosecution presented Exhibits "Q" to "T." Based on these documents, the Court of Appeals concluded that "[p]rivate complainant sent a demand letter to appellant to make good said checks x x x. Appellant failed to pay the face value of the eleven checks or make arrangement for the full payment thereof within 90 days after receiving the notice."24 [CA Decision, p. 11; rollo, p. 62.]

Upon closer examination of these documents, we find no evidentiary basis for the holding of the trial court and the Court of Appeals that petitioner received a notice that the checks had been dishonored.

True, complainant sent petitioner a registered mail, as shown in Exhibit "Q", informing the latter that the checks had been dishonored. But the records show that petitioner did not receive it. In fact, Postmaster Wilfredo Ulibarri’s letter addressed to complainant’s counsel certified that the "subject registered mail was returned to sender on September 22, 1992 x x x."25 [Exhibit "T," Records, p. 20.]

Notwithstanding the clear import of the postmaster’s certification, the prosecution failed to adduce any other proof that petitioner received the post office notice but unjustifiably refused to claim the registered mail. It is possible that the drawee bank sent petitioner a notice of dishonor, but the prosecution did not present evidence that the bank did send it, or that petitioner actually received it. It was also possible that she was trying to flee from complainant by staying in different addresses. Speculations and possibilities, however, cannot take the place of proof. Conviction must rest on proof beyond reasonable doubt. Clearly, the evidence on hand demonstrates the indelible fact that petitioner did not receive notice that the checks had been dishonored. Necessarily, the presumption that she knew of the insufficiency of funds cannot arise.

Be that as it may, the Court must point out that it cannot rule on petitioner’s civil liability, for the issue was not raised in the pleadings submitted before us.

We must stress that BP 22, like all penal statutes, is construed strictly against the State and liberally in favor of the accused.26 [Agpalo, Statutory Construction (1990), p. 208; Nitafan, Notes and Comments on the Bouncing Checks Law, p. 21.] Likewise, the prosecution has the burden to prove beyond reasonable doubt each element of the crime. Hence, the prosecution’s case must rise or fall on the strength of its own evidence, never on the weakness or even absence of that of the defense.

Justice Panganiban, Third Division King v. People , G.R. No. 131540, December 2, 1999

Petitioner denies knowledge of the issuance of the check without sufficient funds and involvement in the transaction with private complainant. However, knowledge involves a state of mind difficult to establish. Thus, the statute itself creates a prima facie presumption, i.e., that the drawer had knowledge of the insufficiency of his funds in or credit with the bank at the time of the issuance and on the check's presentment for payment. 6 Petitioner failed to rebut the presumption by paying the amount of the check within five (5) banking days from notice of the dishonor. 7 His claim that he signed the check in blank which allegedly is common business practice, is hardly a defense. If as he claims, he signed the check in blank, he made himself prone to being charged with violation of BP 22. It became incumbent upon him to prove his defenses. As Treasurer of the corporation who signed the check in his capacity as an officer of the corporation, lack of involvement in the negotiation for the transaction is not a defense.

Justice Torres, SECOND DIVISION, RICARDO A. LLAMADO, petitioner, vs. COURT OF APPEALS and PEOPLE OF THE PHILIPPINES, respondent, [G.R. No. 99032. March 26, 1997.]

"Section 2. Evidence of knowledge of insufficient funds. - The making, drawing and issuance of a check payment of which is refused by the drawee because of insufficient funds in or credit with such bank, when presented within ninety (90) days from the date of the check, shall be prima facie evidence of knowledge of such insufficiency of funds or credit unless such maker or drawer pays the holder thereof the amount due thereon, or makes arrangements for payment in full by the drawee of such check within five (5) banking days after receiving notice that such check has not been paid by the drawee." (Emphasis supplied.)

In other words the presence of the first and third elements of the offense constitutes prima facie evidence that the second element exists. The maker's knowledge of the insufficiency of his funds is legally presumed from the dishonor of his check for insufficiency of funds. This Court has ruled that:

"Violation of the bad checks act is committed when one 'makes or draws and issues any check to apply on account or for value, knowing at the time of issue that he does not have sufficient funds' or 'having sufficient funds in or credit with the drawee bank . . . shall fail to keep sufficient funds or to maintain a credit to cover the full amount of the check if presented within a period of ninety (90) days from the date appearing thereon, for which reason it is dishonored by the drawee bank.'" (People vs. Manzanilla, 156 SCRA 279, 282.)

The gravamen of the offense under B.P. Blg. 22 is the act of making and issuing a worthless check or a check that is dishonored upon its presentment for payment. The law has made the mere act of issuing a bum check a malum prohibitum, an act proscribed by legislature for being deemed pernicious and inimical to public welfare. (Lozano vs. Martinez, Lobaton vs. Cruz, Datuin vs. Pano, Violago vs. Pano, Abad vs. Gerochi, Aguiluz vs. Isnani, Hojas vs. Peñaranda, People vs. Nitafan, G.R. Nos. L-63419, 66839-42, 71654, 74524-25, 75122-49, 75812-13, 75765-67 & 75789, December 18, 1986, 146 SCRA 323).

Justice Grino-Aquino, FIRST DIVISION, PEOPLE OF THE PHILIPPINES, petitioner, vs. HON. PEDRO G. LAGGUI, Presiding Judge of Branch XXXIV of the Regional Trial Court of Pampanga and ELISEO SORIANO, respondents, G.R. Nos. 76262-63. March 16, 1989.

Knowledge of insufficiency of fund is essential element of BP Blg. 22; Prima Facie Presumed by refusal to pay upon presentment.

An essential element of the offense is "knowledge" on the part of the maker or drawer of the check of the insufficiency of his funds in or credit with the bank to cover the check upon its presentment. Since this involves a state of mind difficult to establish, the statute itself creates a prima facie presumption of such knowledge where payment of the check "is refused by the drawee because of insufficient funds in or credit with such bank when presented within ninety (90) days from the date of the check.

Presumption of Knowledge of insufficiency of funds shall not arise when payment is made within five days from receipt of dishonor.

To mitigate the harshness of the law in its application, the statute provides that such presumption shall not arise if within five (5) banking days from receipt of the notice of dishonor, the maker or drawer makes arrangements for payment of the check by the bank or pays the holder the amount of the check.

~See full text of the decision

EN BANC, Justice Yap, FLORENTINA A. LOZANO, petitioner, vs. THE HONORABLE ANTONIO M. MARTINEZ, in his capacity as Presiding Judge, Regional Trial Court, National Capital Judicial Region, Branch XX, Manila, and the HONORABLE JOSE B. FLAMINIANO, in his capacity as City Fiscal of Manila, respondents.[G.R. Nos. L-66839-42. December 18, 1986.]