BETTY KING, petitioner, vs. PEOPLE OF THE PHILIPPINES, respondent. ULANDU

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 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.

Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing the January 30, 1997 Decision1 [Rollo, pp. 52-63.] of the Court of Appeals2 [Sixth Division.] (CA) in CA-GR CR No. 18226 and its November 5, 1997 Resolution3 [Rollo, p. 66.] denying reconsideration. The CA affirmed the June 14, 1994 Decision4 [Rollo, pp. 94-99; penned by Judge Santiago Ranada Jr.] of the Regional Trial Court (RTC) of Makati, Metro Manila5 [Branch 137.] in Criminal Case Nos. 93-3335 to 93-3345 which convicted petitioner of 11 counts of violation of BP 22, otherwise known as the Bouncing Checks Law.

On April 28, 1993, Second Assistant Provincial Prosecutor Jaime A. Adoc filed against petitioner eleven separate Informations,6 [Records, pp. 21-62.] which are identically worded, except for the check number, the amount and the date, as follows:

When arraigned, petitioner, assisted by counsel, pleaded not guilty. After the prosecution presented its evidence and rested its case, petitioner filed a Demurrer to Evidence without leave of court, on the ground that the prosecution failed to prove her guilt beyond reasonable doubt. The trial court denied the Demurrer in its assailed Decision, the dispositive portion of which reads:

As already stated, the Court of Appeals affirmed the RTC in this wise:9 [CA Decision, p. 12; rollo, p. 63.]

Hence, this Petition.10 [This case was deemed submitted for resolution on March 19, 1999, upon receipt by the Court of the respondent's Memorandum.] Miso

The Office of the Solicitor General11 [Through Solicitor General Ricardo P. Galvez, Assistant Solicitor General Rodolfo G. Urbiztondo and Solicitor Procolo M. Olaivar.] summarized the facts, as viewed by the prosecution, in this wise:

As noted earlier, petitioner filed a Demurrer to Evidence without leave of court. In doing so, she waived her right to present evidence and submitted the case for judgment on the basis of the documentary exhibits adduced by the prosecution.13 [Section 15, Rule 119 of the Rules of Court.] Nexâ old

In affirming the trial court, the Court of Appeals explained that the prosecution proved all the elements of the crime. The CA also pointed out that the failure of petitioner to sign the pretrial order was not fatal to the prosecution, because her conviction was based on the evidence presented during the trial.

Petitioner submits the following issues for the Court's consideration:

In the main, the resolution of the Petition hinges on (1) the admissibility and (2) the sufficiency of the prosecution evidence.

The Petition has merit insofar as it contends that the elements of the crime charged have not all been proven beyond reasonable doubt. Maniksâ

Because the first, the second and the third issues raised by petitioner all refer to the same matter, they will be discussed together. She contends that the pieces of documentary evidence presented by the prosecution during pretrial are inadmissible, because she did not sign the pretrial agreement as required under Section 4 of Rule 118 of the Rules of Court.15 ["Sec. 4. Pre-trial agreements must be signed. --- No agreement or admission made or entered during the pre-trial conference shall be used in evidence against the accused unless reduced to writing and signed by him and his counsel."] Hence, she argues that there is no basis for her conviction.

True, a pretrial agreement not signed by a party is inadmissible. However, the conviction of petitioner was based not on that agreement but on the documents submitted during the trial, all of which were admitted without any objection from her counsel. During the hearing on September 17, 1993, the prosecution offered as evidence the dishonored checks, the return check tickets addressed to private complainant, the notice from complainant addressed to petitioner that the checks had been dishonored, and the postmaster’s letter that the notice had been returned to sender. Petitioner's counsel did not object to their admissibility. This is shown by the transcript of stenographic notes taken during the hearing on September 17, 1993:

From the foregoing, it is clear that the prosecution evidence consisted of documents offered and admitted during the trial. In view of this, the CA correctly ruled that Fule v. Court of Appeals17 [162 SCRA 446, June 22, 1988.] would not apply to the present controversy. In that case, a hearing was conducted during which the prosecution presented three exhibits. However, Fule's conviction was "based solely on the stipulation of facts made during the pre-trial on August 8, 1985, which was not signed by the petitioner, nor by his counsel." Because the stipulation was inadmissible in evidence under Section 4 of Rule 118, the Court held that there was no proof of his guilt.

In the present case, petitioner’s conviction was based on the evidence presented during trial, and not on the stipulations made during the pretrial. Hence, petitioner’s admissions during the trial are governed not by the Fule ruling or by Section 4 of Rule 118, but by Section 4 of Rule 129 which reads: MisÓ sc

Hence, the trial court and the Court of Appeals did not err in taking cognizance of the said documentary evidence.

Petitioner argues that the prosecution failed to prove beyond reasonable doubt the elements of the offense. After a careful consideration of the records of this case, we believe and so rule that the totality of the evidence presented does not support petitioner’s conviction for violation of BP 22.

Section 1 of BP 22 defines the offense as follows: Scä

Accordingly, this Court has held that the elements of the crime are as follows:18 [People v. Laggui, 171 SCRA 305, March 16, 1989.] NcmmisÓ

We shall analyze the evidence, purportedly establishing each of the aforementioned elements which the trial and the appellate courts relied upon.

Contending that the prosecution failed to prove the first element, petitioner maintains that she merely signed the questioned checks, without indicating therein the date and the amount involved. She adds that they were improperly filled up by Eileen Fernandez. Thus, she concludes, she did not "issue" the dishonored checks in the context of the Negotiable Instruments Law, which defines "issue" as the "first delivery of the instrument complete in form to a person who takes it as a holder."19 [Petitioner’s Memorandum, p. 32; rollo, p. 220.] Scncä m

Petitioner’s contentions are not meritorious. The questioned checks, marked as Exhibits "A" to "K," contained the date of issue and the amount involved. In fact, petitioner even admitted that she signed those checks. On the other hand, no proof was adduced to show that petitioner merely signed them in blank, or that complainant filled them up in violation of the former's instructions or their previous agreement. The evidence on record is clear that petitioner issued eleven checks, all of which were duly filled up and signed by her.

Neither are we persuaded by petitioner’s argument that "there appears no evidence on record that the subject checks were unpaid and dishonored."20 [Petitioner’s Memorandum, p. 35; rollo, p. 223.] Under Section 3 of BP 22, "the introduction in evidence of any unpaid and dishonored check, having the drawee’s refusal to pay stamped or written thereon, or attached thereto, with the reason therefor as aforesaid, shall be prima facie evidence of the making or issuance of said check, and the due presentment to the drawee for payment and the dishonor thereof, and that the same was properly dishonored for the reason written, stamped, or attached by the drawee on such dishonored check."

In the present case, the fact that the checks were dishonored was sufficiently shown by the checks themselves, which were stamped with the words "ACCOUNT CLOSED." This was further supported by the returned check tickets issued by PCI Bank, the depository bank, stating that the checks had been dishonored.

Clearly, these documents constitute prima facie evidence that the drawee bank dishonored the checks. Again, no evidence was presented to rebut the prosecution’s claim. Sdaad

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.]

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.] Sâ djad

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.] Sppedscâ

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. CÓ alrsc

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.

WHEREFORE, the assailed Decision of the Court of Appeals is hereby REVERSED and SET ASIDE. Petitioner Betty King is ACQUITTED for failure of the prosecution to prove all the elements of the crimes charged. No pronouncement as to costs.

Melo, (Chairman), Vitug, Purisima, and Gonzaga-Reyes, JJ., concur.12/20/99 9:40 AM