17 People VS Reyes

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G.R. No. 154159. March 31, 2005.

* negotiability is not the gravamen of the crime of estafa through bouncing checks. It is the
fraud or deceit employed by the accused in issuing a worthless check that is penalized.

PEOPLE OF THE PHILIPPINES, appellee, vs. ALOMA REYES and TRICHIA MAE
REYES (AT LARGE), accused. ALOMA REYES, appellant. Same; Same; Same; Deceit, to constitute estafa, should be the efficient cause of
defraudation—a check issued in payment of a preexisting obligation does not constitute
Criminal Law; Estafa; Bouncing Checks Law; Elements.— Under Article 315, paragraph estafa even if there is no fund in the bank to cover the amount of the check.—Deceit, to
2(d) of the Revised Penal Code, estafa is committed by any person who shall defraud another constitute estafa, should be the efficient cause of defraudation. It must have been committed
by false pretenses or fraudulent acts executed prior to or simultaneously with the commission either prior or simultaneous with the defraudation complained of. There must be
of the fraud. It is committed with the following essential elements which must be proved to concomitance: the issuance of a check should be the means to obtain money or property from
sustain a conviction: 1. postdating or issuance of a check in payment of an obligation the payee. Hence, a check issued in payment of a pre-existing obligation does not constitute
contracted at the time the check was issued; 2. lack of sufficiency of funds to cover the check; estafa even if there is no fund in the bank to cover the amount of the check.
and 3.damage to the payee thereof.

Appeals; The rule that findings of facts of trial courts are accorded not only respect, but at
Same; Same; Same; Banks and Banking; Words and Phrases; Negotiable Order of times, finality, admits of exceptions, as when there is a misapprehension of facts.—While
Withdrawal (NOW) Accounts are defined as interest-bearing deposit accounts that combine findings of fact of trial courts are accorded not only respect, but at times, finality, this rule
the payable on demand feature of checks and the investment feature of savings accounts; The admits of exceptions, as when there is a misappreciation of facts.
fact that a NOW check shall be payable only to a specific person, and not valid when payable
to “BEARER” or to “CASH” or when indorsed by the payee to another person, is
inconsequential; Negotiability is not the gravamen of the crime of estafa through bouncing
checks—it is the fraud or deceit employed by the accused in issuing a worthless check that is Criminal Law; Estafa; Bouncing Checks; There is no estafa through bouncing checks when it
penalized.—Section X223 of the Manual of Regulations for Banks defines Negotiable Order is shown that private complainant knew that the drawer did not have sufficient funds in the
of Withdrawal (NOW) Accounts as interest-bearing deposit accounts that combine the bank at the time the check was issued to him.—We held in Pacheco v. Court of Appeals that
payable on demand feature of checks and the investment feature of savings accounts. The fact there is no estafa through bouncing checks when it is shown that private complainant knew
that a NOW check shall be payable only to a specific person, and not valid when made that the drawer did not have sufficient funds in the bank at the time the check was issued to
payable to “BEARER” or to “CASH” or when indorsed by the payee to another person, is him. Such knowledge negates the element of deceit and constitutes a defense in estafa
inconsequential. The same restriction is produced when a check is crossed: only the payee through bouncing checks.
named in the check may deposit it in his bank account. If a third person accepts a cross check
and pays cash for its value despite the warning of the crossing, he cannot be considered in
good faith and thus not a holder in due course. The purpose of the crossing is to ensure that Same; Same; Same; Presumption of Innocence; As a matter of right, the constitutional
the check will be encashed by the rightful payee only. Yet, despite the restriction on the presumption of innocence of the accused must be favored regardless of the inconsistencies in
negotiability of cross checks, we held that they are negotiable instruments. To be sure, her testimony or the weakness of her own testimony.—Despite the inconsistencies in the
testimony of appellant, these were minor and did not destroy her credibility nor shatter the

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theory of the defense. To be sure, the prosecution failed to prove the guilt of appellant beyond
reasonable doubt. As a matter of right, the constitutional presumption of innocence of
appellant must be favored regardless of the inconsistencies in her testimony or the weakness
of her own defense. G.R. No. 154159. March 31, 2005

Same; Same; Same; An accused acquitted of estafa may be held civilly liable in the same PEOPLE OF THE PHILIPPINES, Appellee,
case where the facts established by the evidence so warrant.—Appellant, however, is not
without liability. An accused acquitted of estafa may be held civilly liable in the same case vs.
where the facts established by the evidence so warrant. In the case at bar, the records lack
sufficient evidence to determine the amount of her remaining obligation. aloma reyes and trichia mae reyes (AT LARGE), accused. ALOMA REYES, Appellant.

Appeals; Evidence; Remand of Cases; Where the evidence is not sufficient to warrant a DECISION
conclusion, the case should be remanded to the court a quo for reception of further
evidence.—This Court is not a trier of facts and where the evidence on record is not sufficient
to warrant a conclusion, the case should be remanded to the court a quo for reception of PUNO, J.:
further evidence.

This is a direct appeal1 from the Sentence2 of the Regional Trial Court of Davao City,
APPEAL from a decision of the Regional Trial Court of Davao City, Br. 11. Branch 11, finding appellant Alamo Reyes guilty beyond reasonable doubt of estafa by
postdating a bouncing check under Article 315, paragraph 2(d) of the Revised Penal Code, as
amended by Presidential Decree No. 818, and sentencing her to an indeterminate penalty of
The facts are stated in the opinion of the Court. six (6) years and one (1) day to twelve (12) years of prision mayor as minimum to thirty (30)
years of reclusion perpetua as maximum.3

The Solicitor General for appellee.


Appellant claims that she issued the subject check in payment of a pre-existing obligation.
Marissa Grace L. Corrales for appellant. Thus, her liability must be civil, not criminal. Private complainant Jules-Berne Alabastro
counters that appellant, together with her daughter and co-accused Trichia Mae Reyes, issued
him the check for rediscounting. He was allegedly lured to part with his money due to their
People vs. Reyes, 454 SCRA 635, G.R. No. 154159 March 31, 2005 seeming honest representations that the check was good and would never bounce.

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The following information dated May 26, 1999 was filed against the appellant and Trichia explained that a NOW Account is a savings account where the drawer may issue checks
Mae Reyes: payable only to a specific payee. A NOW check cannot be issued payable to "BEARER."
Hence, it cannot be further negotiated.

That sometime in February 1998, in the City of Davao, Philippines, and within the
jurisdiction of this Honorable Court, the above-mentioned accused, conspiring and Go identified the subject check as a NOW check issued under appellant’s NOW Account. It
confederating together, by means of false pretense and with intent to defraud, willfully, was presented for payment with Allied Bank, the drawee bank of appellant, on April 2, 1998
unlawfully and feloniously issued to JULES-BERNE I. ALABASTRO, Allied Bank, Toril but was returned to Metrobank, the depository bank of private complainant, on April 3, 1998
Branch[,] Davao City Check No. 066815 – A dated March 31, 1998 in the amount of for the reason "account closed."11
₱280,000.00 in payment of an obligation, which the accused was able to obtain by reason of
and simultaneously with the issuance of the said check, that when said check was presented
to the drawee bank for encashment, the same was dishonored for the reason "ACCOUNT On cross-examination, Go explained the other entries in the account ledger card. He reiterated
CLOSED" and after having been notified by such dishonor said accused failed and refused to that appellant only had a two-month transaction with Allied Bank under the NOW Account.
redeem said check despite repeated demands, to the damage and prejudice of the complainant On re-direct examination, he identified another document12 containing "referral items." The
in the aforesaid amount. document showed a list of NOW checks (the "referral items") presented to Allied Bank for
clearing after the NOW Account had been closed.13 These "referral items" were not listed in
the account ledger card which he previously presented because once an account is closed, no
CONTRARY TO LAW.4 further entries are entered in the account ledger card.

A Warrant5 for their arrest was subsequently issued. However, only appellant was arrested. Private complainant Jules-Berne I. Alabastro was also presented by the prosecution. He
She posted a cash bond for her provisional liberty.6 Her co-accused had flown to Australia testified that he was first introduced by Estrella Paulino to appellant and her daughter
before her arrest warrant could be served. She remains at large. sometime in 1996 at his office in Davao City. The latter allegedly begged to have their
personal checks discounted. Upon the assurance that their checks were good and considering
that appellant and her sister used to be province mates of private complainant’s parents, he
Appellant pleaded not guilty upon arraignment.7 Trial ensued. allegedly discounted more or less five or six checks. When asked to present the checks, he
explained that he had returned the checks each time they bounce. Upon return, appellant
replaced them with cash. He only had in his possession the subject check -- the only check
that appellant has not replaced with cash.14
Danilo Go, acting Branch Head of Allied Bank, Toril Branch, Davao City, testified for the
prosecution. He presented an account ledger card8 dated December 31, 1997. The account
ledger card contained the transaction records of Allied Bank NOW (Negotiable Order of
Withdrawal) Account No. 1333-00033-8 under the name Aloma Reyes and Trichia Mae He further testified that like the other checks which he previously discounted, he gave them
Reyes9 which was opened on January 27, 1997 and closed on March 26, 1997.10 He cash for the subject check. When he deposited it to his account on its due date, it was

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dishonored by the drawee bank upon presentment for the reason "account closed."15 He Appellant explained that the subject check was one of the sixteen (16) checks. Four (4) of
immediately notified appellant but the latter allegedly refused to replace it with cash.16 He these checks were offered in evidence and marked as exhibits.19 None of the checks was
sent a demand letter by registered mail but appellant did not heed his demand. He thus filed supposed to exceed the amount of ₱13,000.00. Hence, during her arrest, she was surprised to
the instant case. learn for the first time about the ₱280,000.00-check. She got confused that there were two (2)
NOW checks dated March 31, 1998: the subject check (Check No. 066815) with the amount
of ₱280,000.00, and the other check (Check No. 066816),20 with the amount of
On cross-examination, private complainant recounted that when he met appellant in 1996, she ₱13,000.00.21
applied for a loan. He had also previously discounted five or six checks of appellant at
varying amounts on different occasions. He, however, said that he was not a moneylender; he
helped his wife in the flower shop business. He also refused to disclose the source of the On cross-examination, she said that she could not produce the other eleven (11) of the sixteen
money he used in allegedly discounting the subject ₱280,000.00-check. He said the source (16) checks. She admitted signing the checks with her daughter but maintained that the
was "quite personal."17 maximum amount she agreed to pay for her obligation was ₱13,000.00 per check. When
asked about a ₱2,000.0022 check she issued as recorded in her account ledger card, she said
that she probably issued it when her business was still good.23 She also claimed that she was
To strengthen his rediscounting theory, private complainant averred that the subject check not able to receive the demand letter sent to her home address. Most of the times, she was in
was complete when it was issued to him: his name, the signatures of appellant and her the farm.24
daughter, the date, and the amount of the subject check were already written on the
instrument. He denied that he was the one who filled in the date and the amount of the subject
check.18 On re-direct examination, appellant claimed that it was private complainant who wrote the
date and the amount in the subject check. She alleged that he was also the one who filled in
the dates and the amounts on the other checks on exhibit. She allegedly authorized private
The defense presented the sole testimony of appellant. She admitted that she started complainant to fill in the blank entries for the dates and the amounts because she was grateful
borrowing money from private complainant in 1996 when she was still engaged in the that the latter assented to the payment arrangement of ₱13,000.00 per installment.
wholesale of softdrinks. Whenever she borrowed money, she replaced it with checks. Furthermore, it was private complainant who would schedule the payment dates.25
However, she suffered business reverses and closed shop.

Appellant’s outstanding obligation was allegedly ₱232,000.00 when she delivered the
To pay her outstanding obligations with private complainant, the latter allegedly made her instruments. She placed all sixteen (16) checks on the office table of private complainant.
issue, in one and the same occasion, sixteen (16) NOW checks as installment payments. The They were already signed by her and her daughter. Private complainant thereafter wrote the
first installment payment was to start at ₱6,000.00; the succeeding fifteen payments were to dates and the amounts. She did not examine the checks after private complainant filled in the
be at ₱13,000.00 each. The last installment was to fall on March 31, 1998. dates and the amounts. She was also not aware if private complainant wrote "₱280,000.00"
on the subject check. She allegedly only saw him write "₱13,000.00" on the checks.26

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On rebuttal, private complainant maintained that the subject check was complete when it was
handed to him for rediscounting. He did not know who filled in the date and the amount. He
countered that it was appellant’s and her daughter’s signatures that were missing. They A. The NOW instrument, together with the other NOW Instruments, was issued in payment
signed the checks in his presence. He speculated that appellant probably needed a big amount of a pre-existing debt.
for their softdrinks business at that time. When asked to explain why there were two checks
similarly dated March 31, 1998, he merely stated that "there was one check that bounced,
Check No. 066815, in the amount of ₱280,000.00[,] dated March 31, 1998."27 B. The NOW instrument was a mere evidence of a loan or security thereof serving The same
purpose as a promissory note.

The court a quo convicted appellant upon finding that the prosecution had sufficiently proven
the essential elements of estafa. Hence, this appeal. III

Appellant raises the following Assignment of Errors: The trial court seriously erred in concluding that the prosecution sufficiently proved the
essential elements of the crime charged. To be sure, the prosecution’s evidence fell short of
the degree of proof, that is proof beyond reasonable doubt, required by law to be established
I in order to overcome the constitutionally enshrined presumption of innocence in favor of
accused-appellant. Verily:

The trial court seriously erred in treating the NOW Instrument as a cheCk within the meaning
of Article 315 Paragraph 2(D) of the Revised Penal Code, considerING that it is a non- A. The prosecution’s evidence are severely flawed, and, by themselves, insufficient and
negotiable instrument, the same being payable only to the person specified therein and cannot unreliable.
be made payable to bearer or casH or be indorsed to a third person.

B. The inconsistencies in the testimony of the defense’s lone witness are harmless and should
II not have prejudiced the defense in light of the principle of law that the prosecution must
establish the guilt of the accused by the strength of its own evidence and not on the weakness
of the defense’s evidence or lack of it.

Assuming arguendo that the NOW Instrument is a check within the ambit of Article 315
Paragraph 2(D) of the Revised Penal Code, the trial court seriously erred in finding that fraud
and/or deceit attended the issuance of the NOW instrument. From the prosecution’s as welL C. The prosecution’s evidence does not fulfill the test of moral certainty and therefore is
as the defense’S evidence glare (sic) the fact that: insufficient to support a judgment of conviction.28

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person. Only the payee can encash this "NOW" with the drawee bank or deposit it in his
account with the drawee bank or with any other bank.
We shall resolve the appeal by determining the pivotal issue: whether all the elements of
estafa under Article 315, paragraph 2(d) of the Revised Penal Code were sufficiently
established in the case at bar.
Appellant posits that this condition strips the subject check the character of negotiability.
Hence, it is not a negotiable instrument under the Negotiable Instruments Law, and not the
"check" contemplated in Criminal Law.31
Under Article 315, paragraph 2(d) of the Revised Penal Code, estafa is committed by any
person who shall defraud another by false pretenses or fraudulent acts executed prior to or
simultaneously with the commission of the fraud. It is committed with the following essential
elements which must be proved to sustain a conviction: We disagree.

1. postdating or issuance of a check in payment of an obligation contracted at the time the Section X223 of the Manual of Regulations for Banks defines Negotiable Order of
check was issued; Withdrawal (NOW) Accounts as interest-bearing deposit accounts that combine the payable
on demand feature of checks and the investment feature of savings accounts.

2. lack of sufficiency of funds to cover the check; and


The fact that a NOW check shall be payable only to a specific person, and not valid when
made payable to "BEARER" or to "CASH" or when indorsed by the payee to another person,
is inconsequential. The same restriction is produced when a check is crossed: only the payee
3. damage to the payee thereof.29 named in the check may deposit it in his bank account. If a third person accepts a cross check
and pays cash for its value despite the warning of the crossing, he cannot be considered in
good faith and thus not a holder in due course. The purpose of the crossing is to ensure that
Appellant avers that the subject check does not fall within the meaning of Section 185 of the the check will be encashed by the rightful payee only.32 Yet, despite the restriction on the
Negotiable Instruments Law which defines a "check" as a "bill of exchange drawn on a bank negotiability of cross checks, we held that they are negotiable instruments.33
payable on demand." First, the NOW check is drawn against the savings, not the current
account, of appellant. Second, it is payable only to a specific person or the "payee" and is not
valid when made payable to "bearer" or to "cash." 30 Appellant quotes the restriction written To be sure, negotiability is not the gravamen of the crime of estafa through bouncing checks.
on the face of a NOW check: It is the fraud or deceit employed by the accused in issuing a worthless check that is
penalized.

"NOW" shall be payable only to a specific person, natural or juridical. It is not valid when
made payable to "BEARER" or to "CASH" or when [i]ndorsed by the payee to another
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Deceit, to constitute estafa, should be the efficient cause of defraudation. It must have been Bank. Private complainant’s theory that these checks were previously issued to him for
committed either prior or simultaneous with the defraudation complained of.34 There must be rediscounting at different times is incredulous:
concomitance: the issuance of a check should be the means to obtain money or property from
the payee. Hence, a check issued in payment of a pre-existing obligation does not constitute
estafa even if there is no fund in the bank to cover the amount of the check.35 Atty. Zamora- The question is, how many checks were discounted for the accused. More or
less 5 or 6 checks[?]

Appellant maintains that the subject check was one of the sixteen (16) checks she issued at
once to private complainant in payment of a pre-existing obligation.36 The court a quo xxx
however upheld private complainant’s theory that appellant issued him the subject check for
rediscounting in February 1998, long after her account was closed on March 26, 1997.

Witness- There were previous checks discounted but on different occasions.37

We reverse.

Atty. Zamora- xxx You said there were 5 or six checks discounted. You have list of those?

While findings of fact of trial courts are accorded not only respect, but at times, finality, this
rule admits of exceptions, as when there is a misappreciation of facts.
Atty. Alabastro- Already answered. No list.38

The evidence on record debunks the rediscounting theory of private complainant. He did not
part with his money out of the fraudulent assurances of appellant that the subject check was It puzzles the Court that after the NOW check dated August 31, 1997 bounced on September
good and would never bounce. 3, 1997 for the reason "ACCOUNT CLOSED," private complainant would still discount
appellant’s checks in succession. It baffles us more that private complainant would discount a
₱280,000.00-check in February 1998 despite knowledge of the closure of appellant’s NOW
Account.
A careful examination of the records establishes that appellant issued him the subject check
in payment of a pre-existing obligation. Both private complainant and appellant concur in
their testimonies that they met sometime in 1996. Both parties also admit that at this point,
appellant started borrowing money from private complainant. We held in Pacheco v. Court of Appeals39 that there is no estafa through bouncing checks
when it is shown that private complainant knew that the drawer did not have sufficient funds
in the bank at the time the check was issued to him. Such knowledge negates the element of
deceit and constitutes a defense in estafa through bouncing checks.
It cannot be denied that the subject check, like the four other NOW checks on exhibit, was
issued and signed by the same persons and charged to the same NOW Account at Allied
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In the case at bar, private complainant knew that appellant did not only have insufficient
funds; he knew her NOW Account was closed at the time he allegedly discounted the subject
check. This is proven by the following undisputed facts: In the Information filed, it was stated, viz.:

First. Appellant presented four (4) NOW checks, each bearing the amount of ₱13,000.00, and That sometime in February 1998, in the City of Davao, Philippines, and within the
respectively dated August 31, 1997, January 31, 1998, March 1, 1998 and March 31, 1998. jurisdiction of this Honorable Court, the above-mentioned accused, conspiring and
confederating together, by means of false pretense and with intent to defraud, willfully,
unlawfully and feloniously issued to JULES-BERNE I. ALABASTRO, Allied Bank, Toril
Branch[,] Davao City Check No. 066815 – A dated March 31, 1998 in the amount of
The evidence on record shows that private complainant deposited the NOW check dated ₱280,000.00 x x x43 (emphasis supplied)
August 31, 1997 to his Metrobank account on September 1, 1997. On September 2, 1997,
Metrobank returned the instrument to Allied Bank with the notation "ACCOUNT CLOSED."
Hence, as early as September 2, 1997, private complainant already knew that appellant’s
NOW Account had been closed.40 If the subject check was issued to him in February 1998, as he alleges, at that time he already
knew that the NOW Account where the subject NOW check is charged was closed. The
NOW checks on record are irrefragable pieces of evidence that private complainant knew the
NOW Account was closed.
Second. Fatal to private complainant’s case are his own admissions as to when he received
the subject check. In his Affidavit-Complaint41 dated February 25, 1999, private complainant
stated, viz.:
In light of the established facts, private complainant’s rediscounting theory must fail.
Appellant issued the subject check in payment of a pre-existing obligation. When the NOW
Account was closed on March 26, 1997, private complainant already had in his possession
x x x That sometime in Feb. 1998, a certain ALOMA REYES AND TRICHIA MAE REYES the NOW check in question. It was one of the sixteen (16) NOW checks previously issued by
x x x came to me and begged to have their personal check discounted with earnest private complainant before the closure of the NOW Account. No deceit or damage attended
representations that their check was good check and would never bounce and because of their the transaction. There being none in the case at bar, there can be no estafa through bouncing
seeming honest representations I was lured to discount their check which is --- checks.

ALLIED BANK CHECK NO. 066815-A DATED MAR. 31, 1998 AMOUNTING TO Despite the inconsistencies44 in the testimony of appellant, these were minor and did not
₱280,000.00. destroy her credibility nor shatter the theory of the defense. To be sure, the prosecution failed
to prove the guilt of appellant beyond reasonable doubt. As a matter of right, the
constitutional presumption of innocence of appellant must be favored regardless of the
They handed the check to me and I simultaneously gave them the money;42 (emphasis inconsistencies in her testimony or the weakness of her own defense.
supplied)
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Appellant, however, is not without liability. An accused acquitted of estafa may be held
civilly liable in the same case where the facts established by the evidence so warrant. In the
case at bar, the records lack sufficient evidence to determine the amount of her remaining
obligation.

This Court is not a trier of facts and where the evidence on record is not sufficient to warrant
a conclusion, the case should be remanded to the court a quo for reception of further
evidence.

IN VIEW WHEREOF, appellant Aloma Reyes is ACQUITTED of estafa under Article 315,
paragraph 2(d) of the Revised Penal Code, as amended. The assailed Sentence of the
Regional Trial Court of Davao City, Branch 11, dated March 13, 2002 is REVERSED and
SET ASIDE. The case is REMANDED to the court a quo for the determination of appellant’s
civil liability. The Director of the Bureau of Corrections is DIRECTED to release her
IMMEDIATELY unless she is being lawfully held for another offense.

SO ORDERED.

Austria-Martinez, Callejo, Sr., Tinga, and Chico-Nazario, JJ., concur.

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