To begin with, the second element involves knowledge on the part of the issuer at the time of the check's issuance that he did not have enough funds or credit in the bank for payment thereof upon its presentment. B.P. No. 22 creates a presumption juris tantum that the second element prima facie exists when the first and third elements of the offense are present.11 [Magno v. Court of Appeals, 210 SCRA 471, 480 (1992).] But such evidence may be rebutted. If not rebutted or contradicted, it will suffice to sustain a judgment in favor of the issue, which it supports.12 [People v. Nuque, 58 O.G. 8442, 8445]. As pointed out by the Solicitor General, such knowledge of the insufficiency of petitioner's funds "is legally presumed from the dishonor of his checks for insufficiency of funds."13 [Rollo, p. 272.] But such presumption cannot hold if there is evidence to the contrary. In this case, we find that the other party has presented evidence to contradict said presumption. Hence, the prosecution is duty bound to prove every element of the offense charged, and not merely rely on a rebuttable presumption.

Admittedly, what are involved here are postdated checks. Postdating simply means that on the date indicated on its face, the check would be properly funded, not that the checks should be deemed as issued only then.14 [People v. Tongko, 290 SCRA 595 (1998).] The checks in this case were issued at the time of the signing of the Contract to Sell in August 1989. But we find from the records no showing that the time said checks were issued, petitioner had knowledge that his deposit or credit in the bank would be insufficient to cover them when presented for encashment.15 [TSN, December 1, 1993, pp. 9-14.] On the contrary, there is testimony by petitioner that at the time of presentation of the checks, he had P150,000.00 cash or credit with Citibank.

As the evidence for the defense showed, the closure of petitioner's Account No. 845515 with Citibank was not for insufficiency of funds. It was made upon the advice of the drawee bank, to avoid payment of hefty bank charges each time petitioner issued a "stop payment" order to prevent encashment of postdated checks in private respondent's possession.16 [Supra.] Said evidence contradicts the prima facie presumption of knowledge of insufficiency of funds. But it establishes petitioner's state of mind at the time said checks were issued on August 24, 1989. Petitioner definitely had no knowledge that his funds or credit would be insufficient when the checks would be presented for encashment. He could not have foreseen that he would be advised by his own bank in the future, to close his account to avoid paying the hefty banks charges that came with each "stop payment" order issued to prevent private respondent from encashing the 30 or so checks in its possession. What the prosecution has established is the closure of petitioner's checking account. But this does not suffice to prove the second element of the offense under B.P. Blg. 22, which explicitly requires "evidence of knowledge of insufficient funds" by the accused at the time the check or checks are presented for encashment.

To rely on the presumption created by B.P. No. 22 as the prosecution did in this case, would be to misconstrue the import of requirements for conviction under the law. It must be stressed that every element of the offense must be proved beyond reasonable doubt, never presumed. Furthermore, penal statutes are strictly construed against the State and liberally in favor of the accused. Under the Bouncing Checks Law, the punishable act must come clearly within both the spirit and letter of the statute.17 [Idos v. Court of Appeals, 296 SCRA 194, 202-203 (1998).]

While B.P. Blg. 22 was enacted to safeguard the interest of the banking system,18 [Magno v. Court of Appeals, supra.] it is difficult to see how conviction of the accused in this case will protect the sanctity of the financial system. Moreover, protection must also be afforded the interest of townhouse buyers under P.D. No. 957.19 ["SEC. 23. Non-Forfeiture of Payments. – No installment payment made by a buyer in a subdivision or condominium project for the lot or unit he contracted to buy shall be forfeited in favor of the owner or developer when the buyer, after due notice to the owner or developer, desists from further payment due to the failure of the owner or developer to develop the subdivision or condominium project according to the approved plans and within the time limit for completing the same. Such buyer may, at his option, be reimbursed the total amount paid including amortization interests but excluding delinquency interests with interest thereon at the legal rate."] A statute must be construed in relation to other laws so as to carry out the legitimate ends and purposes intended by the legislature.20 [King v. Hernaez, 114 Phil. 730, 740 (1962); Mejia v. Balolong, 81 Phil. 497, 501 (1948).] Courts will not strictly follow the letter of one statute when it leads away from the true intent of legislature and when ends are inconsistent with the general purpose of the act.21 [Hidalgo v. Hidalgo, supra, Tañada v. Cuneco, 103 Phil. 1051, 1086 (1957); Torres v. Limjap, 56 Phil. 141, 145 (1931); People v. Concepcion, 44 Phil. 126, 130 (1922); US v. Toribio, 15 Phil. 85, 90 (1910).] More so, when it will mean the contravention of another valid statute. Both laws have to be reconciled and given due effect.

Note that we have upheld a buyer's reliance on Section 23 of P.D. 957 to suspend payments until such time as the owner or developer had fulfilled its obligations to the buyer.22 [Antipolo Realty Corp. v. National Housing Authority, 153 SCRA 399, 409, 411 (1987).] This exercise of a statutory right to suspend installment payments, is to our mind, a valid defense against the purported violations of B.P. Blg. 22 that petitioner is charged with.

Given the findings of the HLURB as to incomplete features in the construction of petitioner's and other units of the subject condominium bought on installment from FRC, we are of the view that petitioner had a valid cause to order his bank to stop payment. To say the least, the third element of "subsequent dishonor of the check... without valid cause" appears to us not established by the prosecution. As already stated, the prosecution tried to establish the crime on a prima facie presumption in B.P. Blg. 22. Here that presumption is unavailing, in the presence of a valid cause to stop payment, thereby negating the third element of the crime.

Justice Quisumbing, Second Division, Sycip, Jr. v. CA and People [G.R. No. 125059. March 17, 2000]

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.]

En Banc, Justice Pardo, Rosa Lim v. People G.R. 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.

Under Batas Pambansa Blg. 22 (BP 22), the prosecution must prove not only that the accused issued a check that was subsequently dishonored. It must also establish that the accused was actually notified that the check was dishonored, and that he or she failed, within the five banking days from receipt of the notice, to pay the holder of the check the amount due thereon or to make arrangement for its payment. Absent proof that the accused received such notice, a prosecution for violation of the Bouncing Checks Law cannot prosper.

Evidence of knowledge of insufficient funds. 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 the notice that such check has not been paid by the drawee." Verily, BP 22 gives the accused an oppurtunity 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." [146 SCRA 324, December 18, 1986, per Yap, CJ]. This oppurtunity, however, can be used only upon receipt of the by the accused of a notice of dishonor. [Lina Lim Lao v. Court of Appeals, 274 SCRA 572, June 20, 1997, Per Panganiban, J.] 

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.

[Lina Lim Lao v. Court of Appeals, 274 SCRA 572, June 20, 1997, Per Panganiban, J.] 

In this light, the postulate of Respondent Court of Appeals that "(d)emand on the Corporation constitutes demand on appellant (herein petitioner),"[35] is erroneous. Premiere has no obligation to forward the notice addressed to it to the employee concerned, especially because the corporation itself incurs no criminal liability under B.P. 22 for the issuance of a bouncing check. Responsibility under B.P. 22 is personal to the accused; hence, personal knowledge of the notice of dishonor is necessary. Consequently, constructive notice to the corporation is not enough to satisfy due process. Moreover, it is petitioner, as an officer of the corporation, who is the latter's agent for purposes of receiving notices and other documents, and not the other way around. It is but axiomatic that notice to the corporation, which has a personality distinct and separate from the petitioner, does not constitute notice to the latter.

[Lina Lim Lao v. Court of Appeals, 274 SCRA 572, June 20, 1997, Per Panganiban, J.] 

However, for liability to attach under Batas Pambansa Blg. 22, it is not enough that the prosecution establishes that a check was issued and that the same was subsequently dishonored. The prosecution must also prove the second element, that is, it must further show that the issuer, at the time of the check’s issuance, had knowledge that he did not have enough funds or credit in the bank for payment thereof upon its presentment.  Since the second element involves a state of mind which is difficult to verify, Section 2 of Batas Pambansa Blg. 22 creates a presumption juris tantum that the second element prima facie exists when the first and third elements of the offense are present (Magno v. People, 210 SCRA 471 [1992]).  Section 2 provides:

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 or credit with such bank, when presented within ninety 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 truth, this Court declared in King v. People (G.R. No. 131540, December 2, 1999) that “the prima facie presumption arises when the 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… This opportunity, however, can be used only upon receipt by the accused of a notice of dishonor.” Thus, the presumption that the issuer had knowledge of the insufficiency of funds is brought into existence only after it is proved that the issuer had received a notice of dishonor and that, within five days from receipt thereof, he failed to pay the amount of the check or to make arrangement for its payment.

King v. People, decided by this Division, involves a set of facts similar to the case at bar.  In said case, the accused therein was proven to have issued eleven checks, all of which were duly filled up and signed by her.  It was also clearly established that these eleven checks were dishonored, as shown by the checks themselves which were stamped “ACCOUNT CLOSED” and further supported by the return tickets issued by PCI Bank stating that the checks had been dishonored.  Yet, even if the prosecution had already established the issuance of the checks and their subsequent dishonor, this Court still required the prosecution to show that the issuer knew of the insufficiency of funds by proving 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.

Moreover, in Lina Lim Lao v. CA (274 SCRA 572 [1997]), we emphasized that “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 postulate 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.”

Aside from the above testimony, no other reference was made to the demand letter by the prosecution.  As can be noticed from the above exchange, the prosecution alleged that the demand letter had been sent by mail.  To prove mailing, it presented a copy of the demand letter as well as the registry return receipt.  However, no attempt was made to show that the demand letter was indeed sent through registered mail nor was the signature on the registry return receipt authenticated or identified.  It cannot even be gleaned from the testimony of private complainant as to who sent the demand letter and when the same was sent.  In fact, the prosecution seems to have presumed that the registry return receipt was proof enough that the demand letter was sent through registered mail and that the same was actually received by petitioners or their agents.

As adverted to earlier, it is necessary in cases for violation of Batas Pambansa Blg. 22, that the prosecution prove that the issuer had received a notice of dishonor.  It is a general rule that when service of notice is an issue, the person alleging that the notice was served must prove the fact of service (58 Am Jur 2d, Notice, § 45).  The burden of proving notice rests upon the party asserting its existence.  Now, ordinarily, preponderance of evidence is sufficient to prove notice.  In criminal cases, however, the quantum of proof required is proof beyond reasonable doubt.  Hence, for Batas Pambansa Blg. 22 cases, there should be clear proof of notice.  Moreover, it is a general rule that, when service of a notice is sought to be made by mail, it should appear that the conditions on which the validity of such service depends had existence, otherwise the evidence is insufficient to establish the fact of service (C.J.S., Notice, § 18).  In the instant case, the prosecution did not present proof that the demand letter was sent through registered mail, relying as it did only on the registry return receipt.  In civil cases, service made through registered mail is proved by the registry receipt issued by the mailing office and an affidavit of the person mailing of facts showing compliance with Section 7 of Rule 13 (See Section 13, Rule 13, 1997 Rules of Civil Procedure).  If, in addition to the registry receipt, it is required in civil cases that an affidavit of mailing as proof of service be presented, then with more reason should we hold in criminal cases that a registry receipt alone is insufficient as proof of mailing.  In the instant case, the prosecution failed to present the testimony, or at least the affidavit, of the person mailing that, indeed, the demand letter was sent.

Moreover, petitioners, during the pre-trial, denied having received the demand letter (p. 135, Rollo.).  Given petitioners’ denial of receipt of the demand letter, it behooved the prosecution to present proof that the demand letter was indeed sent through registered mail and that the same was received by petitioners.  This, the prosecution miserably failed to do.  Instead, it merely presented the demand letter and registry return receipt as if mere presentation of the same was equivalent to proof that some sort of mail matter was received by petitioners.  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 (Central Trust Co. v. City of Des Moines, 218 NW 580).

Likewise, for notice by mail, it must appear that the same was served on the addressee or a duly authorized agent of the addressee.  In fact, the registry return receipt itself provides that “[a] registered article must not be delivered to anyone but the addressee, or upon the addressee’s written order, in which case the authorized agent must write the addressee’s name on the proper space and then affix legibly his own signature below it.” In the case at bar, no effort was made to show that the demand letter was received by petitioners or their agent.  All that we have on record is an illegible signature on the registry receipt as evidence that someone received the letter. As to whether this signature is that of one of the petitioners or of their authorized agent remains a mystery.  From the registry receipt alone, it is possible that petitioners or their authorized agent did receive the demand letter.  Possibilities, however, cannot replace proof beyond reasonable doubt.  There being insufficient proof that petitioners received notice that their checks had been dishonored, the presumption that they knew of the insufficiency of the funds therefor cannot arise.

As we stated in Savage v. Taypin (G.R. No. 134217, May 11, 2000), “penal statutes must be strictly construed against the State and liberally in favor of the accused.” Likewise, the prosecution may not rely on the weakness of the evidence for the defense to make up for its own blunders in prosecuting an offense.  Having failed to prove all the elements of the offense, petitioners may not thus be convicted for violation of Batas Pambansa Blg. 22.

Justice Melo, Third Division, VICTOR TING “SENG DEE” and EMILY CHAN-AZAJAR, petitioners, vs. COURT OF APPEALS and PEOPLE OF THE PHILIPPINES, respondents. [G.R. No. 140665.  November 13, 2000]