STELCO MARKETING V.

CA 210 SCRA 51

FACTS:
 Petitioner was engaged in the distribution and sale of structiural

steel bars. RYL bought on several occasion large quantities of steel bars but
the same were never paid for despite several demands by petitioner.

On a relevant date, RYL gave to Armstrong Industries a check in payment of

its obligations. The check was drawn by Steelweld Corporation— allegedly
the owner of RYL persuaded the president of Steelweld to accommodate the
former in its obligation. The check, when deposited was thereafter
dishonored due to insufficient funds. A case ensued for violations of BP22 but
the case was dismissed as the check was held to be for accommodation
purposes only.

Thereafter a complaint was filed by petitioner against RYL and Steelweld for
the recovery of sum of money in payment of the steel bars ordered. RYL was
nowhere to be found that is why the proceedings commenced as against
Steelweld only. The trial court decided in favor of petitioner but this was
reversed by the CA.

HELD:
 Petitioner contends that the acquittal of Lim and Tianson didn't
operate to release Steelweld from its liability as an accommodation party.
Noteworthy is that neither said pronouncement nor any other part of the
judgment of acquittal declared it liable to petitioner. To be sure, as regards
an accommodation party, the condition of lack of notice of any infirmity or
defect in title of the persons negotiating it is of no application since the law
preserves the right of recourse of a holder for value against an
accommodation party notwithstanding knowledge that at the time of taking
the instrument, knew him only as an accommodation party.

Further, there is no evidence to show that petitioner possessed the check

before the instrument’s presentment and dishonor. In what transpired during
the transactions involving the check, evidence and facts show that there was
any participation or intervention on the part of petitioner. What the record
shows is that only after the check was deposited and dishonored, petitioner
came into possession of it in some way and was able to give it in evidence at
the trial of the civil case it has instituted against the drawers of the check.

Sycip vs Court of Appeals, 328 SCRA 447

By LLBe:LawLifeBuzzEtcetera

Facts: On August 24, 1989, petitioner Francisco T. Sycip, Jr., agreed to buy, on installment, from Francel
Realty Corporation (FRC), a townhouse unit in the latter’s project at Bacoor, Cavite. Upon execution of the
contract to sell, as required, issued to FRC, forty-eight (48) postdated checks, each in the amount of
P9,304.00,covering 48 monthly installments. After moving in his unit, Sycip complained, to FRC regarding
defects in the unit and incomplete features of the townhouse project. FRC ignored the complaint.
Dissatisfied, Sycip served on FRC two (2) notorial notices to the effect that he was suspending his
installment payments on the unit pending compliance with the project plans and specifications, as approved
by the Housing and Land Use Regulatory Board (HLURB). Sycip and twelve (12) out of fourteen (14) unit
buyers then filed a complaint with the HLURB. The complaint was dismissed as to the defect, but FRC was
ordered by the HLURB to finish all incomplete features of its townhouse project. Sycip appealed the
dismissal of the complaint as to the alleged defects.
Notwithstanding the notorial notices, FRC continued to present for encashment Sycip’s postdated checks in
its possession. Sycip sent “stop payment orders” to the bank. When FRC continued to present the other
postdated checks to the bank as the due date fell, the bank advised Sycip to close his checking account to
avoid paying bank charges every time he made a “stop payment” order on the forthcoming check. Due to
the closure of petitioner’s checking account, the drawee bank dishonored six postdated checks. FRC file a
complaint against petitioner for violations of B.P. Blg. 22 involving said dishonored checks.

Issue: Whether or not the accused is criminally liable of the B.P. Blg. 22?

Held: No. The Bouncing Checks Law (B.P. No. 22), is violated when the following elements are present:
(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. In this case, although the first
element of the offense exists, the other elements have not been established beyond reasonable doubt. The
second element involves knowledge on the part of the issuer at the time of the check’s issuance that he did
not have enough funds or credit in the bank for payment thereof upon its presentment. B.P. No. 22 creates a
presumption juris tantum that the second element prima facie exists when the first and third elements of the
offense are present. But such evidence may be rebutted. If not rebutted or contradicted, it will suffice to
sustain a judgment in favor of the issue, which it supports. Such knowledge of the insufficiency of
petitioner’s funds “is legally presumed from the dishonor of his checks for insufficiency of funds.” But
such presumption cannot hold if there is evidence to the contrary. In this case, the other party has presented
evidence to contradict said presumption. Hence, the prosecution is duty bound to prove every element of
the offense charged, and not merely rely on a rebuttable presumption.

What are involved in this case are postdated checks. Postdating simply means that on the date indicated on
its face, the check would be properly funded, not that the checks should be deemed as issued only then. The
checks were issued at the time of the signing of the Contract to Sell in August 1989. However, there was no
showing that at the time said checks were issued, petitioner had knowledge that his deposit or credit in the
bank would be insufficient to cover them when presented for encashment. The closure of petitioner’s
Account No. 845515 with Citibank was not for insufficiency of funds. It was made upon the advice of the
drawee bank, to avoid payment of hefty bank charges each time petitioner issued a “stop payment” order to
prevent encashment of postdated checks in private respondent’s possession. Said evidence contradicts the
prima facie presumption of knowledge of insufficiency of funds. But it establishes petitioner’s state of
mind at the time said checks were issued. Petitioner definitely had no knowledge that his funds or credit
would be insufficient when the checks would be presented for encashment.

326 SCRA 641 – Mercantile Law – Negotiable Instruments Law – Negotiation – Indorsement – Withdrawal
Slip

Benjamin Napiza maintains an account with the Bank of the Philippine Islands (BPI). In 1987, Napiza was
approached by Henry Chan and the latter gave him a $2,500 Continental Bank Manager’s check. Chan
asked if Napiza can deposit the check to his (Napiza’s BPI account) by way of accommodation and for the
purpose of clearing the said check. Napiza agreed and so he deposited the check on September 3, 1987.
Napiza then delivered a signed blank withdrawal slip to Chan with the condition that the $2,500.00 may
only be withdrawn if the check cleared. For some reason, the withdrawal slip ended up in the hands of one
Ruben Gayon who went to BPI and successfully withdrew the $2,500.00. At the time of the withdrawal, the
check was not yet cleared. Then days later, BPI was notified by the drawee bank named in the check that
the check is actually a counterfeit.
ISSUE: Whether or not Napiza may be held liable to refund the amount of the check.

HELD: No. The Supreme Court ruled that ordinarily, Napiza would have been liable because he is an
accommodation indorser. But due to the attendant circumstances, Napiza is discharged from liability.

The withdrawal slip indicates as well as the rules promulgated by BPI that withdrawal from the bank
should be accompanied by the presentment of the account holder’s (Napiza’s) savings bankbook. This was
not done so in the case at bar because Gayon was able to withdraw without it. Further, BPI allowed the
withdrawal even before the check cleared. BPI already credited the $2,500.00 to Napiza’s account even
without the drawee bank clearing the check. This is contrary to common banking practices and because of
such negligence and lack of diligence, BPI, as the collecting bank, shall suffer the loss.

PEOPLE v. ROBERTO TUGBANG +

Roberto Tugbang and Ma. Elnora Setias were charged under an information (pp. 1-5,
Rollo), dated September 9, 1987, with "Estafa thru Falsification of a Commercial
Documents"

accused, approached Gloria de los Santos, misrepresenting themselves as the

General Manager and Treasurer of the SouthWest Development and Industrial
Group, Inc., Iloilo City, and induced the latter to transfer her investments in the
money market from Genbancor and Bancom Development Corporation to the
SouthWest Development and Industrial Group, Inc., by misrepresenting that her
money invested would receive a higher return and that her investments would be
more protected as SouthWest Development and Industrial Group, Inc., would issue
her postdated checks for whatever amount she had invested and all that she had to
do to assure the return of her capital would be to encash such checks later on, that
her investments would regularly earn interest at the end of each month which
would be personally paid to her at the Office of the SouthWest Development and
Industrial Group, Inc.; that because of the assurances given by the accused,
particularly Roberto Tugbang, the latter made an initial investment of P20,000.00,
by reason of which the accused issued and made out Check No. 322527 in the
amount of P20,000.00, postdated April 2, 1977, drawn against the Bank of the
Philippine Islands, Iloilo Branch, allegedly as security for the P20,000.00 investment
made by Gloria de los Santos, and in the process misrepresented such check to her
to be that of SouthWest Development and Industrial Group, Inc., duly signed by the
accused in their respective capacities as General Manager and Treasurer thereof; the
accused surprisingly stopped delivering such interest payments or return of
investments to said Gloria de los Santos and the former started avoiding her,
causing her to be suspicious; that upon inquiry, Gloria de los Santos discovered that
Southwest Development and Industrial Group, Inc., had never engaged in the money
market business and that it had never authorized the accused to represent them in
such kind of business, and that the checks allegedly issued by the accused were not,
and never were, the checks of Southwest Development and Industrial Group, Inc.,
and that the accused were never authorized to sign checks in behalf of the
corporation in connection with supposed money market business; that the accused,
knowing fully well that the above-mentioned checks that they had uttered and
delivered to Gloria de los Santos, did not belong to Southwest Development and
Industrial Group, Inc., and that they were not authorized to sign the same, had made
untruthful statements in a narration of facts, when they knew that they had a legal
obligation to disclose the truth of what had been narrated by them, and that by
reason of their misrepresentations, deceit, fraud and falsification, they had, wilfully,
unlawfully, and feloniously appropriated and converted to their own use and
benefit, the sum of P262,800.00 belonging to Gloria de los Santos, to the damage and
prejudice of the latter in the said amount, and that notwithstanding repeated
demands made upon them to return said amount, they failed and refused and until
now fail and refuse to do so."

PP v Tugban
The private complainant, Gloria de los Santos, is the mother-in-law of the accused
Roberto Tugbang, the latter being married to the former's daughter, Echel de los
Santos. She testified that sometime in September, 1976 she was approached by
Roberto Tugbang and Elnora Setias who, representing themselves as the manager
and treasurer of SouthWest Development Corporation, respectively, persuaded her
to withdraw her money at PHILCOM and to invest it instead at SouthWest where it
would earn a much higher dividend. She accepted the proposal of the accused and
on September, 1976 she gave them twenty thousand (P20,000.00) pesos. As
evidence of her investment she was issued a postdated Bank of the Philippine Island
(BPI) check for the same amount. At the end of the month, she received from
accused Setias an unspecified amount in cash supposedly representing her
dividend. During the succeeding months until January, 1977, Gloria de los Santos
increased her investment amounting in all, including her initial investment, to two
hundred sixty thousand (P260,000.00) pesos. For every investment she added she
was issued postdated BPI checks as evidence therefor. In all, she received eight BPI
checks (Exhs. "A" to "H").

At the end of each month, Setias would call on Gloria de los Santos to meet the latter
at the building where SouthWest was holding office to hand her dividend. All the
dividends she was given were in cash except for February, 1977 when she was
issued a BPI check numbered C337305, postdated April 13, 1977, in the amount of
two thousand eight hundred (P2,800.00) pesos (Exh. "I"). Ms. de los Santos
approximates the total dividends she was given at thirty thousand (P30,000.00)
pesos.

Failing to receive her dividend for March, 1977 Gloria de los Santos complained to
the accused and was told to deposit the checks she was given on the dates they fall
due. She deposited the checks with the Chartered Bank at Iloilo City but they were
all dishonored by the drawee bank, the BPI. According to Mr. Clemente Alcibar, an
employee of the BPI in charge of recording checks returned to the bank at the time
material to this case, the checks were dishonored for insufficiency of funds and for
no other reasons. More accurately, however, the notices of dishonor show that the
checks were returned without being paid either because it was "not arranged for" or
for "insufficiency of funds" or, as far as the check deposited after June 15, 1977 is
concerned, for reason that the account was already "closed."

Ruling

In this case, however, there was no showing that the complainant parted with her
money by reason of the issuance by the accused of the checks. While the criminal
information and the testimony of Gloria de los Santos assert that the checks were
issued between September, 1976 and January, 1977 (p. 115, t.s.n., August 24, 1978)
in "exchange" for the investment she makes and every other additional investments,
it appears from the testimony of Mr. Clemente Alcibar that the checking account
against which the checks were issued was only opened on February 4, 1977 (p. 150,
t.s.n., March 12, 1979; p. 209, t.s.n., September 12, 1980). It would thus appear that
it was impossible for the accused to have issued the checks at the time they were
given the money by the complainant. At the time, account no. 2535-2 does not exist
and the check stubs have not been issued the accused. The checks issued, therefore,
could not have been the efficient cause of the defraudation.

The trial court in discarding the defense's theory simply reasoned that the checks
could not have been issued as collaterals for the alleged loans because they were
worthless, unsupported by sufficient funds. But this argument cannot be sustained
because the conclusion is drawn before the facts. The checks could have been
issued as collaterals to be encashed at a later date, at which time Tugbang hoped or
expected to have deposited money to cover the amount of the checks.

Further, it was not disputed that there was an occasion when Tugbang had
borrowed money from Gloria de los Santos and in fact paid her with a check drawn
against the account of Rochel General Merchant and was from the same batch/stubs
as all the other checks subject of this case.

We find it peculiar that complainant never noticed that the check she was paid with
by Tugbang for his personal loan was similar and bore the same account number as
the other checks she was issued (Exhibits "A" to "H") which she claims she was
made to believe as that of SouthWest.

Also, considering the large amount of money involved, it is hard to believe she never
mentioned her supposed investment at SouthWest to her daughter, Echel, who
could have told her that the checks being issued to her was against the account of
Rochel which she (Echel) and her husband had opened.