RUTH D. BAUTISTA, PETITIONER, VS. PEOPLE OF THE PHILIPPINES AND SUSAN ALONA, RESPONDENTS.

Bautista versus People of the Philippines

The Case

This is a criminal case for violation of Batas Pambansa Blg. 22, the Bouncing Checks Law, in which the petitioner Ruth Bautista was charged with drawing and issuing a postdated check in the amount of 1,500,000 pesos in payment of a loan, knowing that she had insufficient funds in the drawee bank to cover it. The private complainant Susan Alona is the payee of the dishonored check. The case matters because the Supreme Court uses it to gather, in one decision, the rules a practitioner must know: the constitutional standard for a valid judgment, the procedure on a demurrer to evidence after leave is denied, the effect of presenting a check beyond ninety days from its date, the proof required of notice of dishonor, and the failure of a claim of set-off unsupported by evidence.

Procedural History

The Information was filed before the Municipal Trial Court in Cities of Cavite City. After trial, that court rendered its decision on September 12, 2002, finding Ruth Bautista guilty beyond reasonable doubt, sentencing her to pay a fine of 200,000 pesos with subsidiary imprisonment in case of insolvency, and ordering her to pay civil indemnity equal to the face value of the check, 1,500,000 pesos, plus costs. Ruth elevated the case to the Regional Trial Court of Cavite City. On July 14, 2004, the Regional Trial Court affirmed the decision with modification, adding interest at twelve percent per annum on the indemnity from the date of demand until full payment. Ruth then filed with the Supreme Court a petition for review under Rule 42 of the Rules of Court, seeking to set aside the Regional Trial Court decision.

Facts

During a Christmas party of the Philippine Fleet in December 1997, Ruth Bautista was introduced to Susan Alona by Lina Fajardo. In January 1998, Ruth obtained a loan of 1,500,000 pesos from Susan, delivered in the form of a manager's check from Trader's Royal Bank. In exchange and as payment, Ruth gave Susan Metrobank Check No. 005014037, postdated May 8, 1998.

Susan deposited the check five months after its date, on October 20, 1998. The check bounced upon presentment because it was drawn against insufficient funds, and it was personally returned to Susan. Susan then sent a demand letter requiring Ruth to make arrangements for payment within five working days from receipt of the notice of dishonor. Ruth failed to do so.

Ruth had also obtained a second loan of 1,000,000 pesos, secured by another check dated May 20, 1998, and had given Susan two land titles which she later took back. The 1,000,000 peso loan was apparently settled when Ruth assigned to Susan a condominium unit by deed of assignment. Susan's lawyer sent a demand letter by registered mail, which Ruth received as shown by the registry return card, but Ruth refused to honor her obligation. At trial, the bank records showed that in May 1998 Ruth's account had a beginning balance of 49,700.86 pesos and an ending balance of 16,493.05 pesos, and that when the check was issued on May 8, 1998 the remaining balance was 7,036.94 pesos — amounts far short of 1,500,000 pesos.

Issues

• Whether or not the Regional Trial Court decision is void for failure to comply with the constitutional requirement that a decision state clearly and distinctly the facts and the law on which it is based.
• Whether or not the trial court gravely abused its discretion, and violated the accused's right to due process, when it refused to receive and resolve her demurrer to evidence filed without leave of court after denying her motion for leave.
• Whether or not the prosecution proved beyond reasonable doubt that the accused knew at the time of issue that she had insufficient funds, considering that the check was presented beyond ninety days from its date.
• Whether or not the prosecution proved that a valid notice of dishonor was actually sent to and received by the accused.
• Whether or not the obligation covered by the check was extinguished by set-off through the deed of assignment of the condominium unit.

Applicable Provisions

Section 14, Article VIII of the 1987 Constitution provides:

No decision shall be rendered by any court without expressing therein clearly and distinctly the facts and the law on which it is based.

This is the standard against which the petitioner attacked the Regional Trial Court decision as void.

Section 23, Rule 119 of the Revised Rules on Criminal Procedure provides:

Upon motion of the accused, with or without leave of court, the court may dismiss the action on the ground of insufficiency of evidence.

This governs the demurrer to evidence and the consequences of its denial, which is the heart of the second issue.

Section 2 of Batas Pambansa Blg. 22 provides:

Any person who makes or draws and issues any check to apply on account or for value, knowing at the time of issue 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, which check is subsequently dishonored by the drawee bank for insufficiency of funds or credit, or would have been dishonored for the same reason had not the drawer, without any valid reason, ordered the bank to stop payment, shall be punished by 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 two hundred thousand pesos, or both such fine and imprisonment at the discretion of the court.

This defines the offense and supplies the prima facie presumption of knowledge when the check is presented within ninety days, which the Court construes in the third issue.

Ruling

On the first issue, the Court held that the Regional Trial Court decision substantially complied with the constitutional mandate. It explained the correlation of facts, the weight and admissibility of the evidence, the assessments made, and the conclusions drawn after applying the law. Following People versus Orbita, a decision is adequate if a party desiring to appeal can assign errors against it, and here the accused was able to assign specific errors and discuss them intelligently.

On the second issue, the Court held that the trial court did not gravely abuse its discretion. The grant or denial of a demurrer to evidence is left to the sound discretion of the trial court. The trial court denied the motion for leave because the prosecution had established a prima facie case and because the allegations in the motion were insufficient. Having been denied leave, the petitioner's only right was to adduce evidence in her defense, yet she insisted on filing a demurrer without leave. The denial did not amount to a finding of liability; it merely meant the prosecution had presented sufficient evidence, which the accused could rebut. Due process was satisfied because she was notified of the charge and given the opportunity to explain or defend herself.

On the third issue, the Court held that the ninety day period is not an element of the offense. Its only consequence is that no prima facie presumption of knowledge arises; it does not preclude other proof of knowledge. Here the prosecution proved actual knowledge even without the presumption: the unrebutted testimony that Ruth postdated the check because she knew she had no available cash, the bank records showing balances far below the face amount, and her own admission that she asked Susan to defer presentment.

On the fourth issue, the Court held that the notice of dishonor was duly proved. A demand letter dated January 25, 1999 was sent through counsel and received on her behalf by Naty Cutiaman on February 2, 1999, as shown by the registry return receipt, and Ruth herself admitted receiving a notice of dishonor in her counter-affidavit. The presumption that postal officials regularly performed their duty stood unrebutted.

On the fifth issue, the Court held that no set-off was shown. No evidence of weight was introduced to prove compensation, and the check remained in the private respondent's possession, who demanded satisfaction when it became due. Following People versus Dico, had the indebtedness been paid, the petitioner would have redeemed or taken the check back in the ordinary course of business.

Doctrine

A decision is adequate under Section 14, Article VIII of the Constitution if a party desiring to appeal can assign errors against it; the test is whether the losing party is informed why he lost.

The grant or denial of a demurrer to evidence rests on the sound discretion of the trial court and will not be disturbed absent grave abuse of discretion. Once leave is denied, the accused's only recourse is to adduce evidence in her defense.

The ninety day period in Batas Pambansa Blg. 22 is not an element of the offense. Presentment beyond ninety days merely removes the prima facie presumption of knowledge; knowledge may still be proved by other evidence.

Notice of dishonor may be proved by the demand letter and the registry return receipt, supported by the presumption that postal officials regularly performed their duty, and by the accused's own admission.

A claim of set-off or compensation must be proved by evidence; the retention of the dishonored check by the payee negates payment.

Disposition

The petition was denied and the decision of the Regional Trial Court finding Ruth Bautista guilty of violation of Batas Pambansa Blg. 22 was affirmed.

Remember This

Memorize this line: the ninety day period is not an element of Batas Pambansa Blg. 22; it only removes the prima facie presumption of knowledge, which the prosecution may still prove by other evidence. Examiners use this case for the demurrer to evidence procedure after denial of leave, and for the sufficiency of notice of dishonor proved through the registry return receipt.