MA. CORAZON LIM, PETITIONER, VS. PEOPLE OF THE PHILIPPINES, RESPONDENT.

Lim versus People of the Philippines

The Case

This is Lim versus People of the Philippines, a criminal case for violation of the law on bouncing checks, Batas Pambansa Blg. 22. Ma. Corazon Lim was charged with issuing a check that was dishonored because her account had been closed. Her defense was that she issued the check only to guarantee the loan of her daughter and the daughter's boyfriend, that she never signed the promissory note, and that she never received a notice of dishonor. The case matters because it settles a question every reviewee must be able to answer: can a person who issues a check to secure the debt of another, a mere accommodation party, be held criminally liable under the bouncing checks law? The Court answers yes, and the reason lies in the nature of the offense.

Procedural History

An Information was filed against Lim before the Municipal Trial Court in Cities of Bacolod City. She pleaded not guilty at her arraignment, judicial dispute resolution failed, and the case went to preliminary conference and trial on the merits. The defense presented no evidence. The Municipal Trial Court rendered judgment convicting her, imposing a fine of 82,600 pesos with subsidiary imprisonment in case of insolvency, and ordering her to indemnify the complainant, J.S. Finance Corporation, in the same amount plus costs.

Lim appealed to the Regional Trial Court, Branch 46 of Bacolod City. The Regional Trial Court affirmed the conviction in full and directed her to pay the costs. Her motion for reconsideration was denied. She then came to the Supreme Court by petition for review, assigning errors on the failure to establish the dishonor of the check and on the sufficiency of the notice of dishonor. The Office of the Solicitor General recommended affirmance of the conviction.

Facts

Ma. Cecilia Lim and Emil Lizares had an outstanding account with J.S. Finance Corporation. They executed a promissory note in favor of the finance company, and Ma. Corazon Lim did not sign that note. On January 26, 2005, Ma. Corazon Lim issued Equitable PCI Bank Check No. 0253453, drawn against her own account, for 82,600 pesos in favor of J.S. Finance Corporation, to guarantee the loan obligation of her daughter and the daughter's boyfriend.

When the debtors failed to settle their obligation, the check was presented and was dishonored for the reason "account closed." No demand letter was sent by the finance company to Ma. Cecilia Lim, and no case was filed against either her or Emil Lizares. Instead, J.S. Finance Corporation commenced a criminal case against Ma. Corazon Lim for violation of the bouncing checks law.

At trial, the prosecution admitted that the debtors had an outstanding account, that the promissory note bore no signature of the accused, that no demand letter was sent to the daughter, and that no case was filed against the debtors. The prosecution presented evidence that a notice of dishonor and demand for payment was sent to and received by Lim, a point the defense denied. Lean T. Serdenia testified that she personally delivered a copy of the letter of dishonor to Lim, who refused to acknowledge receipt. Serdenia was not cross-examined, so her assertions stood unrebutted. The defense presented no evidence at all.

Issues

• Whether or not a person who issues a check merely to guarantee or secure the debt of another, without signing the promissory note evidencing that debt, may be held criminally liable for violating the bouncing checks law.
• Whether or not the dishonor of the check was sufficiently established, given the circumstances surrounding the closing of the account.
• Whether or not the notice of dishonor was validly served on the accused.

Applicable Provisions

The decision applies Batas Pambansa Blg. 22, the bouncing checks law, whose elements the Court enumerates as follows:

The law enumerates the elements of B.P. Blg. 22, to wit, (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 the 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.

These elements frame the entire case, because the Court measures Lim's act of issuing the check against each of them.

Ruling

On the first issue, the Court held that Lim is liable. It stressed that the bouncing checks law punishes the mere act of issuing a worthless check, and that the law does not look at the actual ownership of the check or of the account, nor at the intention of the maker or issuer. Quoting its earlier ruling in Ruiz versus People, the Court explained the breadth of the offense:

The mere act of issuing a worthless check, either as a deposit, as a guarantee, or even as an evidence of a pre-existing debt or as a mode of payment is covered by B.P. 22. It is a crime classified as malum prohibitum. The law is broad enough to include, within its coverage, the making and issuing of a check by one who has no account with a bank, or where such account was already closed when the check was presented for payment.

Malum prohibitum means that the act is wrong simply because the law forbids it, so the intent of the issuer does not matter. The Court concluded that the mere act of issuing a worthless check, whether as a principal obligor or as a mere accommodation party, is punishable, and that Lim, who issued the check to secure another's debt, was an accommodation party.

On the second issue, the Court found that the dishonor was established. The check itself, with the notation that it was dishonored for the reason "account closed," was the best evidence of the unpaid indebtedness against the drawer.

On the third issue, the Court rejected Lim's claim of lack of notice. Both lower courts found that she was notified in writing of the dishonor, and Serdenia testified that she delivered a copy of the letter of dishonor, which Lim refused to acknowledge. Because Serdenia was not cross-examined, her assertions were unrebutted. On the penalty, the Court found no reason to depart from its rulings imposing a fine with subsidiary imprisonment in case of insolvency.

Doctrine

The bouncing checks law punishes the mere act of issuing a worthless check. Its gravamen is the making and issuing of a worthless check and putting it in circulation. The law does not look at the actual ownership of the check or of the account against which it is drawn, nor at the intention of the maker, drawer, or issuer. It is a crime classified as malum prohibitum, wrong because prohibited, so good faith or the purpose of guaranteeing another's debt is no defense.

Accordingly, a person who issues a check as an accommodation party, to guarantee or secure the debt of another, is covered by the law. The mere act of issuing a worthless check, whether as a deposit, as a guarantee, as evidence of a pre-existing debt, or as a mode of payment, is punishable. The law even reaches the making and issuing of a check by one who has no account with a bank, or whose account was already closed when the check was presented. These rules tie directly to the three elements the Court quoted: the making, drawing, and issuance of the check for account or value; knowledge of insufficient funds or credit at the time of issue; and subsequent dishonor by the drawee bank.

Disposition

The Supreme Court denied the petition and affirmed the decision of the Regional Trial Court, which had affirmed the conviction of Ma. Corazon Lim, with costs against her.

Remember This

Memorize this line: the bouncing checks law punishes the mere act of issuing a worthless check, whether as a principal obligor or as a mere accommodation party, because it is malum prohibitum. Examiners like to use this case to test whether a student knows that guaranteeing another person's debt with a check does not escape criminal liability, and that the issuer's intent or lack of ownership of the debt is irrelevant.