Before us is a petition seeking a review of the decision and resolution of the Court of Appeals1 [Per Associate Justice Angelina S. Gutierrez and concurred in by Justices Jaime M. Lantin and Bernardo P. Pardo (now Associate Justice of the Supreme Court)] in CA-G.R. No. 08094 affirming the conviction of herein petitioner of violation of B.P. Blg. 22, the Bouncing Checks Law, by the Regional Trial Court, Branch 43, Bacolod City.

The information in this case charged -

Three witnesses - Anacleto B. Palisoc, area sales manager of Filipro, Inc., Linda Nicolas, cashier of Allied Banking Corporation (ABC), and Rogelio Azures, supervising document examiner of the National Bureau of Investigation (NBI) - testified for the prosecution. On the other hand, petitioner Nilo B. Diongzon testified in his own behalf.

The facts are summarized in the following portion of the decision of the Court of Appeals: M-isjuris

During trial, petitioner initially denied that the signatures appearing in the first two checks were his. Then he argued that the three checks were not issued "on account" or "for value" as required in B.P. Blg. 22. Later, however, he admitted that he issued the third check to replace the second check which, he insisted, he did not issue.2 [RTC Decision, p. 8; Rollo, p. 36; RTC Records, p. 478.]

The trial court saw through petitioner’s conflicting claims and held him guilty of violating B.P. Blg. 22.

On appeal, petitioner raised the same defenses he presented during trial. In addition, however, he claimed that the information charged more than one offense and that the issuance of the third check as replacement for the second check constituted novation which thereby extinguished his obligation. The Court of Appeals rejected petitioner’s contentions and affirmed his conviction. However, it held that because B.P. Blg. 22 is a special law and does not contain a provision for subsidiary imprisonment, petitioner was not subject to subsidiary imprisonment in case of insolvency. The dispositive portion of the appellate court’s decision reads:

Petitioner filed a motion for reconsideration wherein he abandoned the defenses he raised in the trial court except that of novation. He argued that novation took place as a result of the partial payment he made and the written undertaking he had executed to pay for the balance of the check. His motion was, however, denied by the Court of Appeals. Hence, this petition for review on certiorari.

Petitioner argues that because of the incompatibility between the last check (Exh. C) and the partial payment and written undertaking he executed, there was a novation of his original obligation so that any incipient criminal liability which he might have had under the former obligation was thereby avoided.

Petitioner raises this issue for the first time on appeal. As already stated, his contentions in the trial court were: (1) that the two checks which had been dishonored had not been issued by him as shown by different signatures they contained, and (2) that since the checks had not been issued "on account" or "for value," an essential element of the crime defined in B.P. Blg. 22 had not been established. It was only after the trial court had rejected these defenses and found petitioner guilty that petitioner advanced the theory of novation in his Supplemental Brief in the Court of Appeals.

This defense was rightfully ignored by the Court of Appeals in its decision affirming petitioner’s conviction. As the Court of Appeals held, novation is not a mode of extinguishing criminal liability and criminal liability, once incurred, cannot be compromised.3 [Rollo, pp. 99-100.] Indeed, there was no novation, and even if there was, petitioner’s liability under B.P. Blg. 22 was not thereby extinguished.

It is well-settled that the following requisites must be present for novation to take place: (1) a previous valid obligation; (2) agreement of all the parties to the new contract; (3) extinguishment of the old contract; and (4) validity of the new one.4 [Reyes v. CA, 332 Phil. 40 (1996)] Newmiso

These requisites, particularly the third, were not proven in this case. As the Court of Appeals held, the transaction became a personal undertaking of the petitioner when he received the goods for delivery but made no delivery thereof either to the credited dealer or to the credit rider.5 [Rollo, p. 95.] Petitioner had an existing obligation to pay the value of the goods for which the check was issued. This obligation was not extinguished when the check was dishonored and a new agreement was reached by the two parties to pay in cash its value. The change in the mode of paying the obligation was not a change in any of the objects or principal conditions of the contract. As Tolentino states, neither acceptance of partial payment nor change of place or manner of payment involves novation.6 [4 A. Tolentino, Commentaries and Jurisprudence on the Civil Code of the Philippines 387 (1995)] For novation cannot be presumed but must be expressly intended by the parties.

The Court of Appeals denied petitioner’s motion for reconsideration on the ground, inter alia, that the written undertaking was not presented as evidence. The records of the trial court show, however, that the existence of the written undertaking was actually admitted by the prosecution during trial,7 [TSN, p. 47, Sept. 8, 1982.] although, for some reason, it was not formally offered in evidence by the prosecution. However that may be, whether the written undertaking was presented or not, the fact remains that there was no novation in this case.

Nor is novation a mode of extinguishing criminal liability. As held by this Court, novation "may prevent the rise of criminal liability as long as it occurs prior to the filing of the criminal information in court."8 [Guingona, Jr. v. City Fiscal of Manila, 128 SCRA 577.] In other words, novation does not extinguish criminal liability but may only prevent its rise.

Petitioner claims that the new agreement took effect prior to the filing of the information in court on December 15, 1981. He argues that, therefore, there could not have been any criminal liability under B.P. Blg. 22.

The argument is untenable. The fact is that the supposed new agreement never took effect as petitioner never complied with his undertaking. In Llamado v. Court of Appeals,9 [337 Phil. 153 (1997)] a similar issue arose. An agreement to partially pay the dishonored check was made, but the accused failed to comply with his promise. This Court ruled:

The Court thus held that the novation theory does not apply where the offer to pay by the debtor, and accepted by the creditor, turns out to be merely an empty promise. In this case, the balance of the check was never paid, as witness Anacleto B. Palisoc testified.10 [TSN, p. 47, Sept. 8, 1982.]

Indeed, the gravamen of the offense of violating B.P. Blg. 22 is the issuance of worthless checks. In this case, petitioner admitted issuing the check which when presented was dishonored. Though he promised to pay its value when it was dishonored, the fact remains that at the time it was presented to the drawee bank, it was not sufficiently funded. Petitioner, as the drawer of the check, is presumed to have knowledge of the insufficient funds, and his failure to pay the value of the check within five banking days from notice of dishonor did not dispute this presumption. On this, the Court of Appeals correctly affirmed the trial court. Acctmis

But we think it was error for the appellate court not to impose subsidiary imprisonment in case of insolvency on the ground that there is no provision in B.P. Blg. 22 allowing for such penalty. This Court has, on several occasions, imposed subsidiary imprisonment in case of insolvency to pay the fine for violation of special laws, notwithstanding the absence of such provision in said laws.11 [See People v. Moreno, 60 Phil. 712 (1934) and Copiaco v. Luzon Brokerage, 66 Phil. 184 (1938) (Revised Motor Vehicles Act); People v. Abedes, 268 SCRA 619 (1997) and Zanoria v. Court of Appeals, 347 Phil. 538 (1997) (Dangerous Drugs Act)] In Llamado v. Court of Appeals,12 [Supra.] we imposed subsidiary imprisonment on petitioner who was convicted of violating B.P. Blg. 22.

WHEREFORE, premises considered, the decision of the Court of Appeals is AFFIRMED with the modification that subsidiary imprisonment be imposed in case of insolvency to pay the fine of P80,647.75.