Wong vs.

Court of Appeals [GR 117857, 2 February 2001] the full case research

Second Division, Quisumbing (J): 4 concur Facts: Luis S. Wong was an agent of Limtong Press Inc. (LPI), a manufacturer of
calendars. LPI would print sample calendars, then give them to agents to present to customers. The agents would get
the purchase orders of customers and forward them to LPI. After printing the calendars, LPI would ship the calendars
directly to the customers. Thereafter, the agents would come around to collect the payments. Wong, however, had a
history of unremitted collections, which he duly acknowledged in a confirmation receipt he co-signed with his wife.
Hence, Wong's customers were required to issue postdated checks before LPI would accept their purchase orders. In
early December 1985, Wong issued 6 postdated checks totaling P18,025.00, all dated 30 December 1985 and drawn
payable to the order of LPI. These checks were initially intended to guarantee the calendar orders of customers who
failed to issue post-dated checks. However, following company policy, LPI refused to accept the checks as guarantees.
Instead, the parties agreed to apply the checks to the payment of Wong's unremitted collections for 1984 amounting to
P18,077.07. LPI waived the P52.07 difference. Before the maturity of the checks, Wong prevailed upon LPI not to deposit
the checks and promised to replace them within 30 days. However, Wong reneged on his promise. Hence, on 5 June
1986, LPI deposited the checks with Rizal Commercial Banking Corporation (RCBC). The checks were returned for the
reason "account closed." The dishonor of the checks was evidenced by the RCBC return slip. On 20 June 1986, LPI
through counsel notified Wong of the dishonor. Wong failed to make arrangements for payment within 5 banking days.
On 6 November 1987, Wong was charged with 3 counts of violation of BP 22 under three separate Informations for the
three checks amounting to P5,500.00, P3,375.00, and P6,410.00 (Criminal Case CBU12055, 12057, and 12058. Upon
arraignment, Wong pleaded not guilty. Trial ensued. On 30 August 1990, the trial court issued its decision, finding Wong
guilty beyond reasonable doubt of the offense of Violations of Section 1 of BP 22 in 3 Counts and sentencing Wong to
serve an imprisonment of 4 months for each count; to pay Limtong the sums of P5,500.00, P6,410.00 and P3,375.00
corresponding to the amounts indicated in Allied Banking Checks 660143451, 66[0]143464 and 660143463 all issued on
30 December 1985 together with the legal rate of interest from the time of the filing of the criminal charges in Court and
pay the costs. Wong appealed his conviction to the Court of Appeals. On 28 October 1994, it affirmed the trial court's
decision in toto. Wong filed the petition for review on certiorari. Issue: Whether the presumption of knowledge of lack
of funds under Section 2 of BP 22 should not apply to Wong, as he avers that LPI deposited the checks 157 days after the
30 December 1985 maturity date, and that he should not be expected to keep his bank account active and funded
beyond the 90-day period. Held: Section 2 (Evidence of knowledge of insufficient funds) of BP 22 provides that "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
Commercial Law – Negotiable Instruments Law, 2006 ( 48 ) Narratives (Berne Guerrero) 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." 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 90 days from the date of the check." To mitigate the harshness of the law in its
application, the statute provides that such presumption shall not arise if within 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. Contrary to Wong's assertions, nowhere in said provision does the law require a maker to maintain
funds in his bank account for only 90 days. Rather, the clear import of the law is to establish a prima facie presumption
of knowledge of such insufficiency of funds under the following conditions (1) presentment within 90 days from date of
the check, and (2) the dishonor of the check and failure of the maker to make arrangements for payment in full within 5
banking days after notice thereof. That the check must be deposited within 90 days is simply one of the conditions for
the prima facie presumption of knowledge of lack of funds to arise. It is not an element of the offense. Neither does it
discharge Wong from his duty to maintain sufficient funds in the account within a reasonable time thereof. Under
Section 186 of the Negotiable Instruments Law, "a check must be presented for payment within a reasonable time after
its issue or the drawer will be discharged from liability thereon to the extent of the loss caused by the delay." By current
banking practice, a check becomes stale after more than 6 months, or 180 days. LPI deposited the checks 157 days after
the date of the check. Hence said checks cannot be considered stale. Only the presumption of knowledge of insufficiency
of funds was lost, but such knowledge could still be proven by direct or circumstantial evidence. LPI did not deposit the
checks because of the reassurance of Wong that he would issue new checks. Upon his failure to do so, LPI was
constrained to deposit the said checks. After the checks were dishonored, Wong was duly notified of such fact but failed
to make arrangements for full payment within 5 banking days thereof. There is sufficient evidence that Wong had
knowledge of the insufficiency of his funds in or credit with the drawee bank at the time of issuance of the checks.

Xxxxxxxxxxx
 [G.R. No. 117857. February 2, 2001]

LUIS S. WONG, petitioner, vs. COURT OF APPEALS and PEOPLE OF THE

PHILIPPINES, respondents.

DECISION
QUISUMBING, J.:

For review on certiorari is the decision dated October 28, 1994 of the Court of Appeals in C.A. G.R. CR
11856[1] which affirmed the decision of the Regional Trial Court of Cebu City, Branch 17, convicting petitioner
on three (3) counts of Batas Pambansa Blg. 22 (the Bouncing Checks Law) violations, and sentencing him to
imprisonment of four (4) months for each count, and to pay private respondent the amounts
of P5,500.00, P6,410.00 and P3,375.00, respectively, corresponding to the value of the checks involved, with the
legal rate of interest from the time of filing of the criminal charges, as well as to pay the costs.
The factual antecedents of the case are as follows:
Petitioner Wong was an agent of Limtong Press Inc. (LPI), a manufacturer of calendars. LPI would print
sample calendars, then give them to agents to present to customers. The agents would get the purchase orders of
customers and forward them to LPI. After printing the calendars, LPI would ship the calendars directly to the
customers. Thereafter, the agents would come around to collect the payments. Petitioner, however, had a history
of unremitted collections, which he duly acknowledged in a confirmation receipt he co-signed with his
wife.[2] Hence, petitioners customers were required to issue postdated checks before LPI would accept their
purchase orders.
In early December 1985, Wong issued six (6) postdated checks totaling P18,025.00, all dated December 30,
1985 and drawn payable to the order of LPI, as follows:

(1) Allied Banking Corporation (ABC) Check No. 660143464-C for P6,410.00 (Exh. B);

(2) ABC Check No. 660143460-C for P 540.00 (Exh. C);

(3) ABC Check No. PA660143451-C for P5,500.00 (Exh. D);

(4) ABC Check No. PA660143465-C for P1,100.00 (Exh. E);

(5) ABC Check No. PA660143463-C for P3,375.00 (Exh. F);

(6) ABC Check No. PA660143452-C for P1,100.00 (Exh. G).

These checks were initially intended to guarantee the calendar orders of customers who failed to issue post-
dated checks. However, following company policy, LPI refused to accept the checks as guarantees. Instead, the
parties agreed to apply the checks to the payment of petitioners unremitted collections for 1984 amounting
to P18,077.07.[3] LPI waived the P52.07 difference.
Before the maturity of the checks, petitioner prevailed upon LPI not to deposit the checks and promised to
replace them within 30 days. However, petitioner reneged on his promise. Hence, on June 5, 1986, LPI deposited
the checks with Rizal Commercial Banking Corporation (RCBC). The checks were returned for the reason
account closed. The dishonor of the checks was evidenced by the RCBC return slip.
On June 20, 1986, complainant through counsel notified the petitioner of the dishonor. Petitioner failed to
make arrangements for payment within five (5) banking days.
On November 6, 1987, petitioner was charged with three (3) counts of violation of B.P. Blg. 22[4] under three
separate Informations for the three checks amounting to P5,500.00, P3,375.00, and P6,410.00.[5]
The Information in Criminal Case No. CBU-12055 reads as follows:[6]

That on or about the 30th day of December, 1985 and for sometime subsequent thereto, in the City
of Cebu, Philippines, and within the jurisdiction of this Honorable Court, the said accused, knowing
at the time of issue of the check she/he does not have sufficient funds in or credit with the drawee
bank for the payment of such check in full upon its presentment, with deliberate intent, with intent
of gain and of causing damage, did then and there issue, make or draw Allied Banking Corporation
Check No. 660143451 dated 12-30-85 in the amount of P5,500.00 payable to Manuel T. Limtong
which check was issued in payment of an obligation of said accused, but when the said check was
presented with said bank, the same was dishonored for reason ACCOUNT CLOSED and despite
notice and demands made to redeem or make good said check, said accused failed and refused, and
up to the present time still fails and refuses to do so, to the damage and prejudice of said Manuel T.
Limtong in the amount of P5,500.00 Philippine Currency.

Contrary to law.

Petitioner was similarly charged in Criminal Case No. 12057 for ABC Check No. 660143463 in the amount
of P3,375.00, and in Criminal Case No. 12058 for ABC Check No. 660143464 for P6,410.00. Both cases were
raffled to the same trial court.
Upon arraignment, Wong pleaded not guilty. Trial ensued.
Manuel T. Limtong, general manager of LPI, testified on behalf of the company. Limtong averred that he
refused to accept the personal checks of petitioner since it was against company policy to accept personal checks
from agents. Hence, he and petitioner simply agreed to use the checks to pay petitioners unremitted collections to
LPI. According to Limtong, a few days before maturity of the checks, Wong requested him to defer the deposit
of said checks for lack of funds. Wong promised to replace them within thirty days, but failed to do so. Hence,
upon advice of counsel, he deposited the checks which were subsequently returned on the ground of account
closed.
The version of the defense is that petitioner issued the six (6) checks to guarantee the 1985 calendar bookings
of his customers. According to petitioner, he issued the checks not as payment for any obligation, but to guarantee
the orders of his customers. In fact, the face value of the six (6) postdated checks tallied with the total amount of
the calendar orders of the six (6) customers of the accused, namely, Golden Friendship Supermarket, Inc.
(P6,410.00), New Society Rice and Corn Mill (P5,500.00), Cuesta Enterprises (P540.00), Pelrico Marketing
(P1,100.00), New Asia Restaurant (P3,375.00), and New China Restaurant (P1,100.00). Although these
customers had already paid their respective orders, petitioner claimed LPI did not return the said checks to him.
On August 30, 1990, the trial court issued its decision, disposing as follows:[7]

Wherefore, premises considered, this Court finds the accused Luis S. Wong GUILTY beyond
reasonable doubt of the offense of Violations of Section 1 of Batas Pambansa Bilang 22 in THREE
(3) Counts and is hereby sentenced to serve an imprisonment of FOUR (4) MONTHS for each
count; to pay Private Complainant Manuel T. Limtong the sums of Five Thousand Five Hundred
(P5,500.00) Pesos, Six Thousand Four Hundred Ten (P6,410.00) Pesos and Three Thousand Three
Hundred Seventy-Five (P3,375.00) Pesos corresponding to the amounts indicated in Allied
Banking Checks Nos. 660143451, 66[0]143464 and 660143463 all issued on December 30, 1985
together with the legal rate of interest from the time of the filing of the criminal charges in Court
and pay the costs.[8]

Petitioner appealed his conviction to the Court of Appeals. On October 28, 1994, it affirmed the trial courts
decision in toto.[9]
Hence, the present petition.[10] Petitioner raises the following questions of law -[11]

May a complainant successfully prosecute a case under BP 22 --- if there is no more

consideration or price or value -- ever the binding tie that it is in contracts in general and in
negotiable instruments in particular -- behind the checks? -- if even before he deposits the
checks, he has ceased to be a holder for value because the purchase orders (PO's) guaranteed by
the checks were already paid?

Given the fact that the checks lost their reason for being, as above stated, is it not then the duty
of complainant -- knowing he is no longer a holder for value -- to return the checks and not to
deposit them ever? Upon what legal basis then may such a holder deposit them and get paid
twice?
 Is petitioner, as the drawer of the guarantee checks which lost their reason for being, still bound
under BP 22 to maintain his account long after 90 days from maturity of the checks?

May the prosecution apply the prima facie presumption of knowledge of lack of funds against
the drawer if the checks were belatedly deposited by the complainant 157 days after maturity,
or will it be then necessary for the prosecution to show actual proof of lack of funds during the
90-day term?

Petitioner insists that the checks were issued as guarantees for the 1985 purchase orders (POs) of his
customers. He contends that private respondent is not a holder for value considering that the checks were
deposited by private respondent after the customers already paid their orders. Instead of depositing the checks,
private respondent should have returned the checks to him. Petitioner further assails the credibility of complainant
considering that his answers to cross-examination questions included: I cannot recall, anymore and We have no
more record.
In his Comment,[12] the Solicitor General concedes that the checks might have been initially intended by
petitioner to guarantee payments due from customers, but upon the refusal of LPI to accept said personal checks
per company policy, the parties had agreed that the checks would be used to pay off petitioners unremitted
collections. Petitioners contention that he did not demand the return of the checks because he trusted LPIs good
faith is contrary to human nature and sound business practice, according to the Solicitor General.
The issue as to whether the checks were issued merely as guarantee or for payment of petitioners unremitted
collections is a factual issue involving as it does the credibility of witnesses. Said factual issue has been settled
by the trial court and Court of Appeals. Although initially intended to be used as guarantee for the purchase orders
of customers, they found the checks were eventually used to settle the remaining obligations of petitioner with
LPI. Although Manuel Limtong was the sole witness for the prosecution, his testimony was found sufficient to
prove all the elements of the offense charged.[13] We find no cogent reason to depart from findings of both the trial
and appellate courts. In cases elevated from the Court of Appeals, our review is confined to alleged errors of
law. Its findings of fact are generally conclusive. Absent any showing that the findings by the respondent court
are entirely devoid of any substantiation on record, the same must stand.[14] The lack of accounting between the
parties is not the issue in this case. As repeatedly held, this Court is not a trier of facts.[15] Moreover, in Llamado
v. Court of Appeals,[16] we held that [t]o determine the reason 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. So what the law
punishes is the issuance of a bouncing check 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 is malum prohibitum. Nothing herein
persuades us to hold otherwise.
The only issue for our resolution now is whether or not the prosecution was able to establish beyond
reasonable doubt all the elements of the offense penalized under B.P. Blg. 22.
There are two (2) ways of violating B.P. Blg. 22: (1) by making or drawing and issuing a check to apply on
account or for value knowing at the time of issue that the check is not sufficiently funded; and (2) by having
sufficient funds in or credit with the drawee bank at the time of issue but failing to keep sufficient funds therein
or credit with said bank to cover the full amount of the check when presented to the drawee bank within a period
of ninety (90) days.[17]
The elements of B.P. Blg. 22 under the first situation, pertinent to the present case, are:[18]

(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 contends that the first element does not exist because the checks were not issued to apply for
account or for value. He attempts to distinguish his situation from the usual cut-and-dried B.P. 22 case by claiming
that the checks were issued as guarantee and the obligations they were supposed to guarantee were already paid.
This flawed argument has no factual basis, the RTC and CA having both ruled that the checks were in payment
for unremitted collections, and not as guarantee. Likewise, the argument has no legal basis, for what B.P. Blg. 22
punishes is the issuance of a bouncing check and not the purpose for which it was issued nor the terms and
conditions relating to its issuance.[19]
As to the second element, B.P. 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.[20] Thus, the makers knowledge is
presumed from the dishonor of the check for insufficiency of funds.[21]
Petitioner avers that since the complainant deposited the checks on June 5, 1986, or 157 days after the
December 30, 1985 maturity date, the presumption of knowledge of lack of funds under Section 2 of B.P. Blg.
22 should not apply to him. He further claims that he should not be expected to keep his bank account active and
funded beyond the ninety-day period.
Section 2 of B.P. Blg. 22 provides:

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.

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. 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.[22]
Contrary to petitioners assertions, nowhere in said provision does the law require a maker to maintain funds
in his bank account for only 90 days. Rather, the clear import of the law is to establish a prima facie presumption
of knowledge of such insufficiency of funds under the following conditions (1) presentment within 90 days from
date of the check, and (2) the dishonor of the check and failure of the maker to make arrangements for payment
in full within 5 banking days after notice thereof. That the check must be deposited within ninety (90) days is
simply one of the conditions for the prima facie presumption of knowledge of lack of funds to arise. It is not an
element of the offense. Neither does it discharge petitioner from his duty to maintain sufficient funds in the
account within a reasonable time thereof. Under Section 186 of the Negotiable Instruments Law, a check must be
presented for payment within a reasonable time after its issue or the drawer will be discharged from liability
thereon to the extent of the loss caused by the delay. By current banking practice, a check becomes stale after
more than six (6) months,[23] or 180 days. Private respondent herein deposited the checks 157 days after the date
of the check. Hence said checks cannot be considered stale. Only the presumption of knowledge of insufficiency
of funds was lost, but such knowledge could still be proven by direct or circumstantial evidence. As found by the
trial court, private respondent did not deposit the checks because of the reassurance of petitioner that he would
issue new checks. Upon his failure to do so, LPI was constrained to deposit the said checks. After the checks were
dishonored, petitioner was duly notified of such fact but failed to make arrangements for full payment within five
(5) banking days thereof. There is, on record, sufficient evidence that petitioner had knowledge of the
insufficiency of his funds in or credit with the drawee bank at the time of issuance of the checks. And despite
petitioners insistent plea of innocence, we find no error in the respondent courts affirmance of his conviction by
the trial court for violations of the Bouncing Checks Law.
However, pursuant to the policy guidelines in Administrative Circular No. 12-2000, which took effect on
November 21, 2000, the penalty imposed on petitioner should now be modified to a fine of not less than but not
more than double the amount of the checks that were dishonored.
WHEREFORE, the petition is DENIED. Petitioner Luis S. Wong is found liable for violation of Batas
Pambansa Blg. 22 but the penalty imposed on him is hereby MODIFIED so that the sentence of imprisonment is
deleted. Petitioner is ORDERED to pay a FINE of (1) P6,750.00, equivalent to double the amount of the check
involved in Criminal Case No. CBU-12057, (2) P12,820.00, equivalent to double the amount of the check
involved in Criminal Case No. CBU-12058, and (3) P11,000.00, equivalent to double the amount of the check
involved in Criminal Case No. CBU-12055, with subsidiary imprisonment[24] in case of insolvency to pay the
aforesaid fines. Finally, as civil indemnity, petitioner is also ordered to pay to LPI the face value of said checks
totaling P18,025.00 with legal interest thereon from the time of filing the criminal charges in court, as well as to
pay the costs.
SO ORDERED.