Llamado v. Court of Appeals
REITERATIONFacts
The Antecedents: Private complainant Leon Gaw delivered P180,000.00 to Ricardo Llamado and Jacinto Pascual, officers of Pan Asia Finance Corporation, with an assurance of repayment on November 4, 1983, plus 12% interest and a share in profits. Llamado and Pascual signed a postdated check (Philippine Trust Company Check No. 047809) for P186,500.00, representing the principal plus 60 days' interest, in the presence of Gaw. The check was issued as payment for the money delivered. Procedural History: Upon deposit, the check was dishonored by the drawee bank due to payment being stopped and insufficient funds. Gaw was notified by his bank that his account was debited. Gaw informed Llamado of the dishonor. Llamado offered in writing to pay 10% of the amount on November 14 or 15, 1983, with the balance to be rolled over for 90 days, which Gaw accepted. However, Llamado failed to remit the 10% and roll over the balance. Gaw demanded payment, but Llamado offered to return only 30% of the money, which Gaw refused. Consequently, a complaint for violation of Batas Pambansa Blg. 22 was filed against Llamado. The Petition: The Court of Appeals affirmed the Regional Trial Court's decision convicting Llamado for violation of Batas Pambansa Blg. 22, sentencing him to one year imprisonment and a fine, with subsidiary imprisonment, and ordering him to reimburse Gaw. Llamado filed a petition for review, alleging errors in his conviction despite the check being contingent payment, his lack of involvement in the transaction, the applicability of the 'novation theory,' and his personal liability for a corporate check.
Issue(s)
Whether the respondent Court of Appeals erred in convicting petitioner of violation of Batas Pambansa Blg. 22 when the check was only a contingent payment for investment which had not been proven to be successful, thus the check was not issued "to apply on account or for value" within the contemplation of the law. Whether the respondent Court of Appeals erred in convicting petitioner of the charge for merely signing the check in question without being actually involved in the transaction for which the check was issued, in disregard of the pronouncement of this Court in Dingle vs. IAC. Whether the respondent Court of Appeals erred in refusing to apply the "novation theory" recognized by this Court in Ong v. Court of Appeals, and Guingona, Jr. v. City Fiscal of Manila, despite admission by private complainant that before the charge was filed, he had entered into a new agreement with petitioner supplanting the check in question. Whether the respondent Court of Appeals erred in holding petitioner personally liable for the amount of the check in question, although it was a check of the Pan Asia Finance Corporation and he signed the same in his capacity as Treasurer of the corporation.
Ruling
The petition is denied, and the decision of the respondent Court of Appeals is affirmed in toto.
Ratio Decidendi
On the issue of the check being a contingent payment and not issued for value: The Court held that the check was issued for an actual valuable consideration of P180,000.00. The law punishes the issuance of a bouncing check, and the reason for its issuance or the terms and conditions thereof do not diminish the offense. To inquire into these would erode public faith in checks as currency substitutes. The mere act of issuing a worthless check is malum prohibitum. The petitioner's claim that the money was for investment to be returned only if the project was successful was deemed untenable, as a receipt and written agreement would have sufficed if that were the case, negating the necessity of issuing a check. On the issue of petitioner's lack of involvement and signing the check in blank: The Court distinguished the present case from Dingle vs. IAC, where the accused was acquitted due to lack of knowledge of the transaction and issuance. In this case, the private complainant testified that petitioner received the money, signed the check in his presence, and was subsequently notified of the dishonor, to which he offered a written settlement. The statute creates a prima facie presumption of knowledge of insufficient funds, which petitioner failed to rebut by timely payment. Signing a check in blank, even if a common practice, does not absolve the signatory from liability under BP 22; rather, it makes them prone to such charges. As Treasurer who signed the check, lack of involvement in the negotiation is not a defense. On the applicability of the "novation theory": The Court ruled that the novation theory does not apply. While the private complainant agreed to petitioner's offer of partial payment and rollover, this promise turned out to be empty, as the payment was never made. This failure to fulfill the agreement effectively delayed the filing of the case but did not extinguish the offense. The essence of novation requires a new, valid obligation that extinguishes the old one, which was not achieved here due to the non-performance of the new agreement. On petitioner's personal liability for a corporate check: The Court found this argument untenable, citing the third paragraph of Section 1 of Batas Pambansa Blg. 22, which states that where a check is drawn by a corporation, the person or persons who actually signed the check in behalf of such drawer shall be liable under the Act. Therefore, as a signatory and Treasurer of the corporation, petitioner is personally liable.
Main Doctrine
The issuance of a bouncing check is malum prohibitum, and the mere act of issuing a worthless check is punishable under Batas Pambansa Blg. 22, irrespective of the purpose for which it was issued or the terms and conditions relating to its issuance. The statute creates a prima facie presumption that the drawer had knowledge of the insufficiency of funds, which can only be rebutted by payment within five banking days from notice of dishonor.