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300 SUPREME COURT REPORTS ANNOTATED

Yu Oh vs. Court of Appeals

*
G.R. No. 125297. June 6, 2003.

ELVIRA YU OH, petitioner, vs. COURT OF APPEALS and

PEOPLE OF THE PHILIPPINES, respondents.

Criminal Law; Jurisdiction; Republic Act (R.A.) 7691 does not

prohibit certain acts or provides penalties for its violation, neither
does it treat of the nature of crimes and its punishment.—A penal
law, as defined by this Court, is an act of the legislature that
prohibits certain acts and establishes penalties for its violations.
It also defines crime, treats of its nature and provides for its
punishment. R.A. No. 7691 does not prohibit certain acts or
provides penalties for its violation; neither does it treat of

_______________

24 Reyes v. Court of Appeals, supra; De Vera v. Court of Appeals, supra;

Jimenez v. Fernandez, 184 SCRA 190, April 6, 1990.

* SECOND DIVISION.

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the nature of crimes and its punishment. Consequently, R.A. No.

7691 is not a penal law, and therefore, Art. 22 of the RPC does not
apply in the present case.
Same; Same; Jurisdiction being a matter of substantive law,
the established rule is that the statute in force at the time of the
commencement of the action determines the jurisdiction of the
court; A law vesting additional jurisdiction in the court cannot be
given retroactive effect.—In the case of Cang vs. Court of Appeals,

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this Court held that “jurisdiction being a matter of substantive

law, the established rule is that the statute in force at the time of
the commencement of the action determines the jurisdiction of the
court.” R.A. No. 7691 was not yet in force at the time of the
commencement of the cases in the trial court. It took effect only
during the pendency of the appeal before the Court of Appeals.
There is therefore no merit in the claim of petitioner that R.A. No.
7691 should be retroactively applied to this case and the same be
remanded to the MTC. The Court has held that a “law vesting
additional jurisdiction in the court cannot be given retroactive
effect.”
Same; Batas Pambansa (B.P.) Bilang. 22; The language of
B.P. Blg. 22 is broad enough to cover all kinds of checks, whether
present dated or postdated, or whether issued in payment of pre-
existing obligations or given in mutual or simultaneous exchange
for something for value.—Petitioner’s claim that cases of “closed
accounts” are not included in the coverage of B.P. Blg. 22 has no
merit considering the clear intent of the law, which is to
discourage the issuance of worthless checks due to its harmful
effect to the public. This Court, in Lozano vs. Martinez, was
explicit in ruling that the language of B.P. Blg. 22 is broad enough
to cover all kinds of checks, whether present dated or postdated,
or whether issued in payment of preexisting obligations or given
in mutual or simultaneous exchange for something of value.
Same; Same; Elements of the Crime of Batas Pambansa Blg.
22.—“B.P. Blg. 22 or the Bouncing Check’s Law seeks to prevent
the act of making and issuing checks with the knowledge that at
the time of issue, the drawer does not have sufficient funds in or
credit with the bank for payment and the checks were
subsequently dishonored upon presentment. To be convicted
thereunder, the following elements must be proved: 1. The
accused makes, draws or issues any check to apply to account or
for value; 2. The accused knows at the time of the issuance that
he or she does not have sufficient funds in, or credit with, the
drawee bank for the payment of the check in full upon its
presentment; and 3. The check is subsequently dishonored by the
drawee bank for insufficiency of funds or credit or it would have
been dishonored for the same reason had not the drawer, without
any valid reason, ordered the bank to stop payment.

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Same; Same; For liability to attach under B.P. Blg. 22,

prosecution must establish that checks were issued, the same were
subsequently dishonored and 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 of payment thereof upon its presentment.—
For liability to attach under B.P. Blg. 22, it is not enough that the
prosecution establishes that checks were issued and that the
same were subsequently dishonored. The prosecution must also
prove 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 of payment thereof upon its presentment.
Same; Same; 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.—Based on this
section, 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. The
presumption or prima facie evidence as provided in this section
cannot arise, if such notice of non-payment by the drawee bank is
not sent to the maker or drawer, or if there is no proof as to when
such notice was received by the drawer, since there would simply
be no way of reckoning the crucial 5-day period.
Same; Same; Failure of the prosecution to prove that
petitioner was given the requisite notice of dishonor is a clear
ground for her acquittal.—A perusal of the testimony of the
prosecution witness Joaquin Novales III, General Manager of
complainant Solid Gold, discloses that no personal demands were
made on appellant before the filing of the complaints against her.
Thus, absent a clear showing that petitioner actually knew of the
dishonor of her checks and was given the opportunity to make
arrangements for payment as provided for under the law, we
cannot with moral certainty convict her of violation of B.P. Blg.
22. The failure of the prosecution to prove that petitioner was
given the requisite notice of dishonor is a clear ground for her
acquittal.

PETITION for review on certiorari of the decision and

resolution of the Court of Appeals.

The facts are stated in the opinion of the Court.

     M. Quevero Taganas for petitioner.
     The Solicitor General for the People.
303

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VOL. 403, JUNE 6, 2003 303

Yu Oh vs. Court of Appeals

AUSTRIA-MARTINEZ, J.:

Before this
1
Court is a petition for review on certiorari of the
decision of the Court of Appeals in CA-G.R. No. CR No.
16390, promulgated on January 30, 1996, affirming the
conviction of petitioner Elvira Yu Oh by the Regional Trial
Court (RTC), Branch 99, Quezon City and the resolution
dated May 30, 1996 which denied her motion for
reconsideration.
The facts as borne by the records are as follows:
Petitioner purchased pieces of jewelry from Solid Gold
International Traders, Inc., a company engaged in jewelry
trading. Due to her failure
2
to pay the purchase price, Solid
Gold filed civil cases against her for specific performance
before the Regional Trial Court of Pasig. On September 17,
1990, petitioner and Solid Gold, through its general
manager Joaquin Novales III, entered 3into a compromise
agreement to settle said civil cases. The compromise
agreement, as approved by the trial court, provided that
petitioner shall issue a total of ninety-nine post-dated
checks in the amount of P50,000.00 each, dated every 15th
and 30th of the month starting October 1, 1990 and the
balance of over P1 million to be paid in lump sum on
November 16, 1994 which is also the due date of the 99th
and last postdated check. Petitioner issued ten checks at
P50,000.00 each, for a total of P500,000.00, drawn against
her account at the Equitable Banking Corporation (EBC),
Grace Park, Caloocan City Branch. Novales then deposited
each of the ten checks on their respective due dates with
the Far East Bank and Trust Company (FEBTC). However,
said checks were dishonored by EBC for the reason
“Account Closed.” Dishonor slips
4
were issued for each check
that was returned to Novales.
On October 5, 1992, Novales filed ten separate
Informations, docketed as Criminal Cases Nos. 92-26243 to
92-36252 before the RTC of Quezon City charging
petitioner with violation of Batas Pambansa Bilang 22,
otherwise known as the Bouncing Checks

_______________

1 Penned by Justice Lourdes K. Tayao-Jaguros and concurred in by

Justices Jorge A. Imperial and B.A. Adefina-dela Cruz (former Ninth
Division).
2 Docketed as Civil Cases No. 58907-59366.

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3 Records, pp. 25-29.

4 Rollo, pp. 65-66.

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5
Law. Except for the dates and the check numbers, the
Informations uniformly allege:

“That on or about the . . . in Quezon City, Philippines, the said

accused did then and there willfully, unlawfully and feloniously
make or draw and issue to JOAQUIN P. NOVALES III to apply
on account or for value Equitable Banking Corp. Grace Park
Caloocan Branch Check No. . . . dated . . . payable to SOLID
GOLD INTERNATIONAL TRADERS, INC. in the amount of
P50,000.00, Philippine Currency, said accused well knowing that
at the time of issue she/he/they did not have sufficient funds in or
credit with the drawee bank for payment of such check in full
upon its presentment, which check when presented for payment
was subsequently dishonored by the drawee bank for insufficiency
of funds/Account Closed and despite receipt of notice of such
dishonor, said accused failed to pay said SOLID GOLD
INTERNATIONAL TRADERS, INC. the amount of said check or
to make arrangement for full payment of the same within five (5)
banking days after receiving
6
said notice.
CONTRARY TO LAW.”

The cases were consolidated and subsequently raffled to

Branch 99 of the said
7
RTC. Upon arraignment, accused
pleaded not guilty. Trial then ensued. On December 22,
1993, the RTC rendered its decision, the dispositive portion
of which reads:

“WHEREFORE, this Court finds the accused GUILTY of ten

counts of violation of B.P. 22 and hereby sentences her to a
penalty of one year imprisonment for each count, or a total of ten
years, to be served in accordance with the limitation prescribed in
par. 4, Article 70 of the Revised Penal Code and to indemnify
complainant the amount of the checks in their totality, or in the
amount of P500,000.00.
8
SO ORDERED.”

Petitioner appealed to the Court of Appeals alleging that:

the RTC has no jurisdiction over the offense charged in the
ten informations; it overlooked the fact that no notice of
dishonor had been given to the appellant as drawer of the
dishonored checks; it failed to consider that the reason of
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“closed account” for the dishonor of the ten checks in these

cases is not the statutory cause to warrant

_______________

5 Effective April 24, 1979.

6 Records, pp. 1-20.
7 Records, p. 78.
8 Rollo, p. 55.

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prosecution, much more a conviction, under B.P. Blg. 22; it

failed to consider that there is only one act which caused
the offense, if any, and not ten separate cases; and it
disregarded the definition of what a ‘check’
9
is under Sec.
185 of the Negotiable Instruments Law.
Finding the appeal to be without merit, the Court of
Appeals affirmed the decision of the trial court with costs
against appellant.
Hence, herein petition raising the following errors:

THAT THE COURT OF APPEALS ERRED IN NOT RESOLVING

THE JURISDICTIONAL ISSUE IN FAVOR OF THE ACCUSED-
APPELLANT BY UNJUSTLY DEPRIVING HER OF THE
LEGAL BENEFITS OF GIVING RETROACTIVE EFFECT TO
THE PROVISION S OF R.A. NO. 7691 EXPANDING THE
JURISDICTION OF THE INFERIOR COURTS TO COVER THE
OFFENSES INVOLVED IN THESE CASES PURSUANT TO
ART. 22 OF THE REVISED PENAL CODE, THUS IN EFFECT
RENDERING THE JUDGMENT OF CONVICTION
PROMULGATED BY THE TRIAL COURT BELOW AND
AFFIRMED BY THE COURT OF APPEALS PATENTLY NULL
AND VOID FOR HAVING BEEN RENDERED WITHOUT OR IN
EXCESS OF JURISDICTION.

II

THAT THE COURT OF APPEALS ERRED IN NOT

RESOLVING IN FAVOR OF ACCUSED-APPELLANT THE
FACT THAT NO NOTICE OF DISHONOR HAD BEEN GIVEN
HER AS DRAWER OF THE DISHONORED “CHECKS”
PURSUANT TO THE REQUIREMENT EXPRESSLY PROVIDED
UNDER BATAS PAMBANSA BILANG 22.
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III

THAT THE COURT OF APPEALS ERRED IN CONSTRUING

THE PROVISIONS OF BATAS PAMBANSA BILANG 22
CONTRARY TO THE WELL-ESTABLISHED RULE OF
STATUTORY CONSTRUCTION THAT “PENAL STATUTES,
SUBSTANTIVE AND REMEDIAL OR PROCEDURAL, ARE, BY
THE CONSECRATED RULE, CONSTRUED STRICTLY
AGAINST THE STATE, OR LIBERALLY IN FAVOR OF THE
ACCUSED” AND THAT “IT IS ALWAYS THE DUTY OF THE
COURT TO RESOLVE THE CIRCUMSTANCES OF EVIDENCE
UPON A THEORY OF INNOCENCE RATHER THAN UPON A
THEORY OF GUILT WHERE IT IS POSSIBLE TO DO SO,” AND
IN SO DOING THE DECI-

_______________

9 Id., pp. 42-43.

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SION APPEALED FROM INDULGED ITSELF IN “JUDICIAL

LEGISLATION” TO FAVOR THE PROSECUTION AND TO
WORK GRAVE INJUSTICE TO THE ACCUSED.

Simply worded, the issues of this case may be stated as

follows: (1) whether or not the appellate court erred in10not
granting retroactive effect to Republic Act No. 7691 in
view of Art. 22 of the Revised Penal Code (RPC); (2)
whether or not notice of dishonor is dispensable in this
case; and (3) whether or not the appellate court erred in
construing B.P. Blg. 22.
We will resolve the first and third issues before
considering the second issue.
First issue—Whether or not the Court of Appeals erred
in not giving retroactive effect to R.A. 7690 in view of
Article 22 of the RPC.
Petitioner argues that: the failure of the appellate court
to give retroactive application to R.A. 7691 is a violation of
Art. 22 of the Revised Penal Code which provides that
penal laws shall have retroactive effect insofar as they
favor the person guilty of the felony; R.A. 7691 is a penal
law in the sense that it affects the jurisdiction of the court
to take cognizance of criminal cases; taken separately, the
offense covered by each of the ten Informations in this case
falls within the exclusive original jurisdiction of the
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Municipal Trial Court under Sec. 2 of R.A. 7691; and the

Court of Appeals is guilty of judicial legislation in stating
that after the arraignment of petitioner, said cases could no
longer be transferred to the MTC without violating the
rules on double
11
jeopardy, because that is not so provided in
R.A. 7691.
The Solicitor General, in its Comment, counters that the
arguments of petitioner are baseless contending that: penal
laws are those which define crimes and provides for their
punishment; laws defining the jurisdiction of courts are
substantive in nature and not procedural for they do not
refer to the manner of trying cases but to the authority of
the courts to hear and decide certain and

_______________

10 AN ACT EXPANDING THE JURISDICTION OF THE

METROPOLITAN TRIAL COURTS, MUNICIPAL TRIAL COURTS, AND
MUNICIPAL CIRCUIT TRIAL COURTS, AMENDING FOR THE
PURPOSE BATAS PAMBANSA BLG. 129, OTHERWISE KNOWN AS
THE “JUDICIARY REORGANIZATION ACT OF 1980,” Approved March
25, 1994.
11 Rollo, pp. 17, 19-21.

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definite cases in the various instances of which they are

susceptible; R.A. No. 7691 is a substantive law and not a
penal law as nowhere in its provisions does it define a
crime neither does it provide a penalty of any kind; the
purpose of enacting R.A. No. 7691 is laid down in the
opening sentence thereof as “An Act Expanding the
Jurisdiction of the Municipal Trial Courts, Municipal
Circuit Trial Courts and the Metropolitan Trial Court”
whereby it reapportions the jurisdiction of said courts to
cover certain civil and criminal case, erstwhile tried
exclusively by the Regional Trial Courts; consequently, Art.
22 of the RPC finds no application to the case at bar;
jurisdiction is determined by the law in force at the time of
the filing of the complaint, and once acquired, jurisdiction
is not affected by subsequent legislative enactments
placing jurisdiction in another tribunal; in this case, the
RTC was vested with jurisdiction to try petitioner’s cases
when the same were filed in October 121992; at that time,
R.A. No. 7691 was not yet effective; in so far as the
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retroactive effect of R.A. No. 7691 is concerned, that same

is limited only to pending civil cases that have not reached
pre-trial stage as provided for in Section 7 thereof and as 13
clarified by this Court in People vs. Yolanda Velasco,
where it was held: “[a] perusal of R.A. No. 7691 will show
that its retroactive provisions apply only to civil cases that
have not yet reached the pre-trial stage. Neither from an
express proviso nor by implication can it be understood as
having retroactive application to criminal 14cases pending or
decided by the RTC prior to its effectivity.”
On this point, the Court fully agrees with the Solicitor
General and holds that Article 22 of the Revised Penal
Code finds no application to the case at bar.
Said provision reads:

ART. 22. Retroactive effect of penal law.—Penal laws shall have a

retroactive effect insofar as they favor the person guilty of a
felony, who is not a habitual criminal, as this term is defined in
Rule 5 of Article 62 of this Code, although at the time of the
publication of such laws a final sentence has been pronounced and
the convict is serving sentence.

_______________

12 Rollo, pp. 70-73.

13 G.R. No. 110592, 252 SCRA 135 (1996).
14 Rollo, p. 74.

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A penal law, as defined by this Court, is an act of the

legislature that prohibits certain acts and establishes
penalties for its violations. It also defines 15crime, treats of
its nature and provides for its punishment. R.A. No. 7691
does not prohibit certain acts or provides penalties for its
violation; neither does it treat of the nature of crimes and
its punishment. Consequently, R.A. No. 7691 is not a penal
law, and therefore, Art. 22 of the RPC does not apply in the
present case.
B.P. Blg. 22, which took effect on April 24, 1979,
provides the penalty of imprisonment of not less than
thirty days but not more than one year or by a fine of not
less than but not more than double the amount of the check
which fine shall in no case exceed P200,000.00, or both
such fine and imprisonment at the discretion of the court.
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R.A. No. 7691 which took effect on June 15, 1994,

amended B.P. Blg. 129, and vested on the Metropolitan,
Municipal and Municipal Circuit Trial Courts jurisdiction
to try cases punishable
16
by imprisonment of not more than
six (6) years. Since R.A. No. 7691 vests jurisdiction17
on
courts, it is apparent that said law is substantive.
18
In the case of Cang vs. Court of Appeals, this Court
held that “jurisdiction being a matter of substantive law,
the established rule is that the statute in force at the time
of the commencement 19of the action determines the
jurisdiction of the court.” R.A. No. 7691 was not yet in
force at the time of the commencement of the cases in the
trial court. It took effect only during
20
the pendency of the
appeal before the Court of Appeals. There is therefore no
merit in the claim of petitioner that R.A. No. 7691 should
be retroactively applied to this case and the same be
remanded to the MTC. The

_______________

15 Lacson vs. Executive Secretary, et al., G.R. No. 128096, 301 SCRA
298, 323 (1999).
16 Sec. 2, Rep. Act No. 7691.
17 DENR vs. Daraman, G.R. No. 125797, February 15, 2002, 377 SCRA
39 and Office of the Court Administrator vs. Matas, Adm. Matter No. RTJ-
92-836, 247 SCRA 9, 18 (1995) and DOH vs. NLRC, G.R. No. 113212, 251
SCRA 700, 707(1995).
18 G.R. No. 105308, 296 SCRA 128 (1998).
19 Id., p. 141. See also Republic vs. Court of Appeals, G.R. No. 92326,
205 SCRA 256, 362 (1992).
20 Rollo, p. 14, Petition, p. 6.

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Court has held that a “law vesting additional21 jurisdiction in

the court cannot be given retroactive effect.”
Third issue—Whether or not the Court of Appeals
erroneously construed B.P. Blg. 22.
Petitioner insists that: penal statutes must be strictly
construed and where there is any reasonable22doubt, it must
always be resolved in favor of the accused; the Court of
Appeals, in construing that B.P. Blg. 22 embraces cases of
“no funds” or “closed accounts” when the express language
of B.P. Blg. 22 penalizes only the issuance of checks that
are subsequently dishonored by the drawee bank for
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“insufficiency” of funds or credit, has enlarged by

implication the meaning
23
of the statute which amounts to
judicial legislation; a postdated check, not being drawn
payable on demand, is technically not a special kind of a
bill of exchange, called check, but an ordinary bill of
exchange payable at a fixed date, which is the date
indicated on the face of the postdated check, hence, the
instrument is still valid and the obligation
24
covered thereby,
but only civilly and not criminally; the trial court also
erroneously 25
cited a portion in the case of Lozano vs.
Martinez that the “language of B.P. Blg. 22 is broad
enough to cover all kinds of checks, whether present dated
or postdated, or whether issued in payment of preexisting
obligations or given in mutual or simultaneous exchange
for something
26
of value,” since the same is mere obiter
dictum; in the interpretation of the meaning of a “check,”
where the law is clear and unambiguous, the law must 27
be
taken as it is, devoid of judicial addition or subtraction.
The Solicitor General counters that a postdated check is
still a check and its being a postdated instrument does not
necessarily make it a bill of exchange “payable at a fixed or
determinable future time” since it is still paid on demand
on the date indicated
28
therein or thereafter just like an
ordinary check. It also points out

_______________

21 Largado vs. Masaganda, L-17624, 5 SCRA 522 (1962).

22 Rollo, p. 25.
23 Id., p. 27.
24 Rollo, p. 31.
25 146 SCRA 323 (1986).
26 Rollo, pp. 32-33.
27 Id., pp. 33-34.
28 Id., p. 78.

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29
that the doctrine laid down in Lozano vs. Martinez was
reiterated in People vs. Nitafan, hence, it can no longer be
argued that the statement in the case of Lozano regarding
the scope of “checks” is mere obiter dictum.
Again, we agree with the Solicitor General and find
petitioner’s claim to be without merit.

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The rationale behind B.P. Blg. 22 was initially explained30

by the Court in the landmark case of Lozano vs. Martinez
where we held that:

The gravamen of the offense punished by B.P. Blg. 22 is the act of

making and issuing a worthless check or a check that is
dishonored upon its presentation for payment . . . The thrust of
the law is to prohibit, under pain of penal sanctions, the making
or worthless checks and putting them in circulation. Because of
its deleterious effects on the public interest, the practice is
proscribed by law. The law punished the act not as 31
an offense
against property, but an offense against public order.
...
The effects of the issuance of a worthless check transcend the
private interests of the parties directly involved in the transaction
and touches the interests of the community at large. The mischief
it creates is not only a wrong to the payee or holder but also an
injury to the public. The harmful practice of putting valueless
commercial papers in circulation, multiplied a thousandfold, can
very well pollute the channels of trade and commerce, injure the
banking system32 and eventually hurt the welfare of society and the
public interest.
33
The same is reiterated in Cueme vs. People where we
pronounced that:

. . . B.P. Blg. 22 was purposely enacted to prevent the

proliferation of worthless checks in the mainstream of daily
business and to avert not only the undermining of the banking
system of the country but also the infliction of damage and injury
upon trade and commerce occasioned by the indiscriminate
issuances of such checks. By its very nature, 34the offenses defined
under B.P. Blg. 22 are against public interest.

_______________

29 215 SCRA 83 (1992).

30 G.R. No. L-63419, 146 SCRA 323 (1986).
31 Id., p. 338.
32 Id., p. 340.
33 G.R. No. 133325, 334 SCRA 795 (2000).
34 Id., p. 803.

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In Recuerdo vs. People, this Court also held that the terms
and conditions surrounding the issuance of the checks are
irrelevant since its primordial intention is to ensure the
stability and commercial35 value of checks as being virtual
substitutes for currency.
Petitioner’s claim that cases of “closed accounts” are not
included in the coverage of B.P. Blg. 22 has no merit
considering the clear intent of the law, which is to
discourage the issuance of worthless checks due to its
harmful effect to the public. This Court, in Lozano vs.
Martinez, was explicit in ruling that the language of B.P.
Blg. 22 is broad enough to cover all kinds of checks,
whether present dated or postdated, or whether issued in
payment of preexisting obligations or given in 36
mutual or
simultaneous exchange for37 something of value.
In People vs. Nitafan, the Supreme Court reiterated
this point and held that:

B.P. Blg. 22 . . . does not distinguish but merely provides that

“[a]ny person who makes or draws and issues any check knowing
at the time of issue that he does not have sufficient funds in or
credit with the drawee bank . . . which check is subsequently
dishonored ... shall be punished by imprisonment . . . Ubi lex non
distinguit nee nos distinguere debemus.
But even if We retrace the enactment of the “Bouncing Check
Law” to determine the parameters of the concept of “check,” we
can easily glean that the members of the then Batasang
Pambansa intended it to be 38
comprehensive as to include all
checks drawn against banks.

In this light, it is easy to see that the claim of petitioner

that B.P. Blg. 22 does not include ‘postdated checks’ and
cases of ‘closed accounts’ has no leg to stand on. The term
“closed accounts” is within the meaning of the phrase “does
not have sufficient funds in or credit with the drawee
bank.”
Anent the second issue: whether or not notice of
dishonor is dispensable in the case at bar. Petitioner failed
to show any cogent reason for us to disturb the findings of
the RTC and the Court of Appeals.

_______________

35 G.R. No. 133036, January 22, 2003, 395 SCRA 638 citing Meriz vs.
People, G.R. No. 134498, November 13, 2001, 368 SCRA 524.
36 Supra, p. 330.
37 G.R. No. 75954, 215 SCRA 79 (1992).
38 Id., p. 83.

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Yu Oh vs. Court of Appeals

B.P. Blg. 22 or the Bouncing Check’s Law seeks to prevent

the act of making and issuing checks with the knowledge
that at the time of issue, the drawer does not have
sufficient funds in or credit with the bank for payment and
the checks 39 were subsequently dishonored upon
presentment. To be convicted thereunder, the following
elements must be proved:

1. The accused makes, draws or issues any check to

apply to account or for value;
2. The accused knows at the time of the issuance that
he or she does not have sufficient funds in, or credit
with, the drawee bank for the payment of the check
in full upon its presentment; and
3. The check is subsequently dishonored by the
drawee bank for insufficiency of funds or credit or it
would have been dishonored for the same reason
had not the drawer, without any 40
valid reason,
ordered the bank to stop payment.

For liability to attach under B.P. Blg. 22, it is not enough

that the prosecution establishes that checks were issued
and that the same were subsequently dishonored. The
prosecution must also prove that the issuer, at the time of
the check’s issuance, had knowledge that he did not have
enough funds or 41credit in the bank of payment thereof upon
its presentment.
Since the second element involves a state of mind which
is difficult to establish, Section 2 of B.P. Blg. 22 created a
prima facie presumption of such knowledge, as follows:

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.

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39 Lagman vs. People, G.R. No. 146238, December 7, 2001, 371 SCRA
686.
40 Danao vs. Court of Appeals, G.R. No. 122353, 358 SCRA 450, 457-458
(2001).
41 Victor Ting “Seng Dee” vs. Court of Appeals, G.R. No. 140665, 344
SCRA 551, 557-558 (2000).

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Yu Oh vs. Court of Appeals

Based on this section, 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
42
of the check or to make
arrangement for its payment. The presumption or prima
facie evidence as provided in this section cannot arise, if
such notice of non-payment by the drawee bank is not sent
to the maker or drawer, or if there is no proof as to when
such notice was received by the drawer, since there would 43
simply be no way of reckoning the crucial 5-day period.
In this case, it is not disputed that checks were issued by
petitioner and said checks were subsequently dishonored.
The question however is, was petitioner furnished a notice
of dishonor? If not, is it sufficient justification to exonerate
petitioner from her criminal and civil liabilities for issuing
the bouncing checks?
The trial court ruled that the second element is present
because:

. . . the accused knew at the time of issuance of the checks that

she did not have sufficient funds in or credit with her drawee
bank for the payment of the checks in full upon their presentment
[as] admitted by her in the Counter-Affidavit she executed during
the preliminary investigation of these criminal cases (itals. ours),
to wit:

4. That the time of the issuance of the said checks, due notice and
information had been so given to Solid Gold anent the actual status of the
checks that the same might not be able to cover the amount of the said
checks so stated therein . . . (Exhibit “N,” “1,” italics supplied).

This fact became evident again during the cross-examination

by the accused’s counsel of the prosecution’s witness, Joaquin
Novales III:
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ATTY. TAGANAS:
Q: And the reason you agreed to the terms and conditions
for the issuance of post-dated checks because you are
also aware the particular time the accused Mrs. Elvira
Yu Oh did not also have enough funds or money in the
bank within which to cover the amount of the checks?
A I am not aware, sir.
  ...

_______________

42 Id.
43 Danao vs. Court of Appeals, supra, pp. 458-459.

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314 SUPREME COURT REPORTS ANNOTATED

Yu Oh vs. Court of Appeals

Q To your knowledge when the accused had already admitted to

you that she had not enough money to pay you?
A That is the terms and promise and agreed upon, sir.
Q But in spite of the fact that she already told you about that,
that you never suspected that she did not have enough money
to cover the checks agreed upon and issued to you?
A Yes, sir.
Q And in spite of the fact she told you you never suspected that
she did not have enough money to cover you . . .
Q You still believe that although she does not have enough
money she still issued checks to you?
A Yes, sir. (TSN, April 6, 1993, pp. 24-26)

At any rate, there is already prima facie evidence of knowledge of

insufficiency of funds on the part of the accused from her failure
to pay the amount due on the checks or to make arrangements for
payment in full by the drawee bank within five banking days
after she received notice of their dishonor, each of the checks
having been presented within ninety days from their respective
dates (B.P. Blg. 22, Sec.
44
2). The defense did not controvert this
evidence, (itals. ours)

Although the trial court in its decision, mentioned that

herein petitioner received notices of dishonor, nowhere in
the records is there proof that the prosecution ever
presented evidence that petitioner received or was
furnished a notice of dishonor. The notices of dishonor that

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were presented in court and marked as Exhibits “D2,” 45

“E-
2,” “F-2,” “G-2,” “H-2,” “I-2,” “J-2,” “K-2,” “L-2,” “C-2” were
all sent to the private complainant, Solid Gold, and not to
petitioner. In convicting petitioner, the trial court, gave
probative weight on the admission of petitioner in her
Counter-Affidavit which she submitted during the
preliminary investigation that at the time of issuance of
the subject checks, she was aware and even told private
complainant that the checks might not be able to cover the
amount stated therein.
The Court of Appeals sustained the RTC, to wit:

. . . Neither can We agree that accused-appellant was still entitled

to notice of dishonor of the bouncing checks as she had no more
checking account with the drawee bank at the time of the
dishonor of the ten checks

_______________

44 Rollo, pp. 52-53.

45 Records, pp. 132-141.

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Yu Oh vs. Court of Appeals

in question. Accused-appellant must have realized that by closing

her checking account after issuing the ten postdated checks, all of
said checks would bounce. Knowing that she had already closed
her checking account with the drawee bank, certainly accused-
appellant would not have expected, even in her wildest
imagination, that her postdated checks would be honored by the
drawee bank. Thus, accused-appellant need not be notified
anymore
46
of the obvious dishonor of her rubber checks, (itals.
ours)

Based on the law and existing jurisprudence, we find that

the appellate court erred in convicting petitioner.
In cases for violation of B.P. Blg. 22, it is necessary that
the prosecution prove that the issuer had received a notice
of dishonor. Since service of notice is an issue, the person
alleging that the notice was served must prove the fact of
service. Basic also is the doctrine that in criminal cases, the
quantum of proof required is proof beyond reasonable
doubt. Hence, for47
cases of B.P. Blg. 22 there should be clear
proof of notice.
Indeed, this requirement cannot be taken lightly
because Section 2 provides for an opportunity for the
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drawer to effect full payment of the amount appearing on

the check, within five banking days from notice of dishonor.
The absence of said notice therefore deprives an accused of
an opportunity to preclude criminal prosecution. In other
words, procedural due process demands that a notice of
dishonor be actually served on petitioner. In the case at
bar, appellant has a right to demand—and the basic
postulate of fairness requires—that the notice of dishonor
be actually sent to and received by her to afford 48
her to
opportunity to aver prosecution under B.P. Blg. 22.
The Solicitor General contends that notice of dishonor is
dispensable in this case considering that the cause of the
dishonor of the checks was “Account Closed” and therefore,
petitioner already knew that the checks will bounce
anyway. This argument has no merit. The Court has
decided numerous cases where checks were

_______________

46 Rollo, p. 44.
47 Ting vs. Court of Appeals, supra, p. 561.
48 Id., p. 559 citing Lina Lim Lao vs. Court of Appeals, 274 SCRA 572
(1997).

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316 SUPREME COURT REPORTS ANNOTATED

Yu Oh vs. Court of Appeals

49
dishonored for the reason, “Account Closed” and we have
explicitly held in said cases that “it is essential for the
maker or drawer to be notified of the dishonor of her check,
so she could pay the value thereof or make arrangements 50
for its payment within the period prescribed by law” and
omission or neglect on the part of the prosecution to prove
that the accused
51
received such notice of dishonor is fatal to
its cause.
A perusal of the testimony of the prosecution witness
Joaquin Novales III, General Manager of complainant Solid
Gold, discloses that no personal demands were made on 52
appellant before the filing of the complaints against her.
Thus, absent a clear showing that petitioner actually knew
of the dishonor of her checks and was given the opportunity
to make arrangements for payment as provided for under
the law, we cannot with moral certainty convict her of
violation of B.P. Blg. 22. The failure of the prosecution to
prove that petitioner was given the requisite53
notice of
dishonor is a clear ground for her acquittal.
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Moreover, as understood by the trial court itself in the

herein aforequoted portion of its decision, General Manager
Novales knew of the non-availability of sufficient funds
when appellant issued the subject checks to him. This
Court has held that there is no violation of B.P. 22 if
complainant was told by 54the drawer that he has no
sufficient funds in the bank.
For these reasons, we reverse the ruling of the Court of
Appeals affirming the trial court’s conviction of petitioner
for violation of B.P. Blg. 22. This is without prejudice,
however, to her civil liability towards private complainant
Solid Gold in the amount of

_______________

49 Caras vs. Court of Appeals, G.R. No. 129900, 366 SCRA 371, 380
(2001); Danao vs. Court of Appeals, G.R. No. 122353, 358 SCRA 450
(2001); Ting vs. Court of Appeals, supra, p. 15; Domagsang vs. Court of
Appeals, G.R. No. 139292, 347 SCRA 75 (2000) and King vs. People, G.R.
No. 131540, 319 SCRA 654 (1999).
50 Caras case, supra.
51 Id., p. 381.
52 TSN, April 6, 1993, pp. 18-19.
53 Id., pp. 383-384, citing King vs. People, G.R. No. 131540, 319 SCRA
654, 670 (1999).
54 Eastern Assurance and Surety Corporation vs. Court of Appeals, 322
SCRA 73, 79 (2000).

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Yu Oh vs. Court of Appeals

P500,000.00 plus interest thereon at the rate 55of 12% per

annum from date of finality of herein judgment.
WHEREFORE, the assailed Decision and Resolution of
the Court of Appeals are hereby REVERSED and SET
ASIDE. Petitioner Elvira Yu Oh is ACQUITTED of the
offense of violation of B.P. Blg. 22 on ten counts for
insufficiency of evidence. However, she is ordered to pay
complainant Solid Gold International Traders, Inc. the
total amount of Five Hundred Thousand Pesos
(P500,000.00) with 12% interest per annum from date of
finality of herein judgment.
SO ORDERED.

     Bellosillo (Chairman), Quisumbing and Callejo, Sr.,

JJ., concur.
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Judgment reversed and set aside. Accused-appellant

acquitted.

Note.—Prima facie presumption does not arise when

the issuer pays the amount of the check or makes
arrangements for its payment within five banking days
after receiving notice that such check has not been paid by
the drawee. (King vs. People, 319 SCRA 654 [1999])

——o0o——

_______________

55 Magno vs. Court of Appeals, G.R. No. 96132, 210 SCRA 471, 482
(1992).

318

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