FELIPA B. CUEME, PETITIONER, VS. PEOPLE OF THE PHILIPPINES, RESPONDENT.

Cueme versus People of the Philippines

The Case

This is the case of Cueme versus People of the Philippines, decided in June 2000. Felipa Cueme, the general manager of two corporations engaged in the cacao trade, was charged with and convicted of fifteen violations of Batas Pambansa Blg. 22, the Bouncing Checks Law. She asks the Supreme Court to overturn her conviction, insisting that she never issued the checks to the complainant and that the checks were never meant to be encashed at all. The case matters because it settles, in the clearest terms, that the offense is malum prohibitum — wrong simply because the law forbids it — so that the purpose behind issuing a worthless check is irrelevant, and because it fixes the ceiling on the fine that may be imposed.

Procedural History

Fifteen separate criminal cases for violations of the Bouncing Checks Law were filed against Cueme before the Regional Trial Court of Makati City. After trial, the court found her guilty in all fifteen cases. For each violation it imposed imprisonment of six months and a fine equal to the face value of the dishonored check, and it ordered her to pay the complainant the face value of the checks with legal interest.

Cueme appealed to the Court of Appeals. The Court of Appeals affirmed the conviction but modified one penalty: in the case involving a check with a face value of 220,000 pesos, it reduced the fine to 200,000 pesos, because the law caps the fine at that amount. Cueme's motion for reconsideration was denied. She then came to the Supreme Court by petition for review, and the Court affirmed the Court of Appeals.

Facts

Helen Simolde was a bank teller at the Bank of the Philippine Islands, Makati Branch. One of the bank's clients was Felipa Cueme, general manager of Mark-Agro Trading Corporation and AMF General Trading Corporation. Both women came from Davao, they became friends, and Simolde began lending money to Cueme. For each loan, Cueme would issue post-dated crossed checks covering the amount lent plus interest. The checks were drawn against the deposit accounts of Mark-Agro Trading Corporation at the bank.

On several occasions Cueme persuaded Simolde not to deposit the checks. But on 9 May 1990, Simolde finally deposited all of them in her own account. Every check was dishonored, stamped drawn against insufficient funds. Simolde immediately informed Cueme and repeatedly demanded payment, but to no avail.

Cueme told a different story at trial. She denied borrowing from Simolde and claimed the money came from investors of Mark-Agro. She denied issuing the checks to Simolde, and said instead that Simolde procured pre-signed blank checks from her secretary, Leonora Gabuan, and filled in the dates, names, and amounts only to show them to prospective investors. Gabuan corroborated her. The trial court, however, believed Simolde, and both the trial court and the Court of Appeals found Cueme guilty.

Issues

• Whether or not Cueme issued the dishonored checks to Simolde, a question of fact turning on the credibility of the witnesses.
• Whether or not the checks, assuming they were intended only to be shown to prospective investors and not to be encashed, can still be the subject of a violation of the Bouncing Checks Law.
• Whether or not the fine imposed in the case involving the 220,000 peso check must be reduced to the statutory ceiling of 200,000 pesos.

Applicable Provisions

Section 1 of Batas Pambansa Blg. 22 defines the offense and fixes the penalty, and it 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 is the very provision under which Cueme was convicted, and its 200,000 peso ceiling on the fine is what required the reduction of one penalty.

Ruling

On the first issue, the Court held that whether Cueme issued the checks to Simolde, or whether Simolde procured them from the secretary, is a question of fact involving the credibility of witnesses. The trial court, having heard the witnesses and observed their conduct, is in the best position to settle that question, and its findings will not generally be disturbed. The Court found no reason to overturn the crediting of Simolde's testimony, noting that the testimony of a lone witness, when credible and trustworthy, is sufficient to convict. Cueme's claim that she merely signed the checks in blank was belied by the fact that some checks bore her signatures at the back, suggesting indorsement, while others containing alterations were countersigned by her. Worse, in her counter-affidavit during the preliminary investigation she had categorically stated that she issued the checks to the complainant, and her secretary had stated in her affidavit that she was instructed to deliver the checks to the complainant. Their claim that they were in a hurry and did not understand the English affidavits was hardly credible, since both were well educated in banking and finance. The Court stressed that in prosecutions under the Bouncing Checks Law, it is incumbent upon the accused to prove her defenses by clear and convincing evidence.

On the second issue, the Court held that the purpose for which the checks were issued is not a defense. The gravamen of the offense is the act of making or issuing a worthless check, or a check that is dishonored upon presentment for payment. The law has made the mere act of issuing a bad check malum prohibitum, and in such cases the only inquiry is whether the law has been breached. Criminal intent is unnecessary, and the defenses of good faith and absence of criminal intent are unavailing. The checks, even assuming they were not intended to be encashed, produce the same effect as ordinary checks. What the law punishes is the issuance of a rubber check itself, not the purpose for which it was issued. To inquire into that purpose would erode public faith in checks as currency substitutes and bring havoc to the trading and banking communities. The Court added that knowledge of insufficient funds is presumed from the dishonor of the check, and once that knowledge is proved, the maker is rendered liable.

On the third issue, the Court agreed with the Court of Appeals. Since the law provides that the fine shall in no case exceed 200,000 pesos, the fine in the case involving the 220,000 peso check must be reduced to 200,000 pesos.

Doctrine

A violation of the Bouncing Checks Law is malum prohibitum. The gravamen of the offense is the act of making or issuing a worthless check, or a check that is dishonored upon presentment for payment. The purpose for which the check was issued, and the terms and conditions of its issuance, are irrelevant. Criminal intent is unnecessary, and good faith and absence of criminal intent are not defenses. The law does not distinguish among kinds of checks, so no such distinction may be made by interpretation. Knowledge of insufficiency of funds is presumed from the dishonor of the check, and the accused must prove her defenses by clear and convincing evidence. Finally, under Section 1 of Batas Pambansa Blg. 22, the fine may not exceed 200,000 pesos, whatever the face value of the check.

Disposition

The Supreme Court affirmed the conviction of Cueme for all fifteen violations, sentencing her to six months imprisonment for each crime and fines totaling 1,686,000 pesos after reducing the fine in one case to 200,000 pesos, and ordering her to pay Simolde the face value of the dishonored checks in the aggregate amount of 2,387,500 pesos with legal interest, plus costs.

Remember This

Memorize this line: the Bouncing Checks Law punishes the issuance of a rubber check itself, not the purpose for which it was issued, because the offense is malum prohibitum. Examiners use this case to test whether a student knows that good faith and lack of criminal intent are no defense under Batas Pambansa Blg. 22, and that the fine can never exceed 200,000 pesos.