ALICIA F. RICAFORTE, PETITIONER, VS. LEON L. JURADO, RESPONDENT.

Ricaforte versus Jurado

The Case

This is a petition for review on certiorari brought by Alicia Ricaforte against Leon Jurado, arising from a complaint for estafa and violation of Batas Pambansa Bilang 22, the Bouncing Checks Law, which Jurado filed against her with the Quezon City Prosecutor's Office. The case matters because it settles a question every reviewee must be able to answer cold: does it matter, for purposes of criminal liability under the Bouncing Checks Law, why a check was issued — whether as payment, as a deposit, as a guarantee, or merely to accommodate another person? The Supreme Court answers that it does not, and in doing so it draws a sharp line between the function of a preliminary investigation and the function of a full trial.

Procedural History

Jurado filed his complaint for estafa and violation of the Bouncing Checks Law with the Quezon City Prosecutor's Office. The Assistant City Prosecutor dismissed the complaint for insufficiency of evidence, finding that Ricaforte had no business transaction with Jurado and that her checks were issued only to accommodate Ruby Aguilar. Jurado's motion for reconsideration was denied.

Jurado then appealed the dismissal to the Department of Justice. The Secretary of Justice modified the prosecutor's resolution: he agreed that the estafa charge should be dismissed, but he directed that an information for violation of the Bouncing Checks Law be filed against Ricaforte. Ricaforte's motion for reconsideration was denied.

Ricaforte went up to the Court of Appeals by a petition for certiorari under Rule 65, assailing the resolutions of the Secretary of Justice as having been issued with grave abuse of discretion. The Court of Appeals denied the petition for lack of merit, holding that a trial on the merits must ensue, since it is there that the reasons for the drawing of the checks can be fully examined. Ricaforte's motion for reconsideration was denied. Hence, this petition for review on certiorari before the Supreme Court.

Facts

Leon Jurado operates and manages a rice mill in Bulacan. Sometime in June 1996, Ruby Aguilar procured rice from him. In payment, Aguilar gave him two checks drawn on the Far East Bank and Trust Company, each in the amount of 431,555 pesos, one dated July 25, 1996 and the other dated August 25, 1996. Both checks had been issued by Alicia Ricaforte. When presented for payment, both were dishonored.

Ricaforte's defense was that Aguilar had lost her Metrobank checkbook and borrowed Ricaforte's checks to pay her obligations to Jurado. Ricaforte lent the checks on the condition that Aguilar would replace them with her own checks once Metrobank issued her a new checkbook. Aguilar then used Ricaforte's checks to pay for her rice procurement. In accordance with the arrangement, Aguilar issued two replacement checks in favor of Jurado, again for 431,555 pesos each. When Ricaforte demanded the return of her checks, Jurado refused, and so she asked her bank to stop payment. Aguilar executed an affidavit corroborating Ricaforte's account.

Jurado denied that the checks were merely accommodation checks. The prosecutor initially found no probable cause, but the Secretary of Justice directed the filing of an information under the Bouncing Checks Law, reasoning that the law punishes the mere making and issuing of worthless checks, and that to first inquire into the arrangement surrounding the issuance of a check would frustrate the purpose of the law.

Issues

• Whether or not the Court of Appeals erred in holding that the Secretary of Justice did not commit grave abuse of discretion in finding probable cause for the filing of an information against Ricaforte for violation of the Bouncing Checks Law.
• Whether or not the fact that the checks were issued merely as a guarantee or accommodation for Aguilar's obligation, and not to apply on account or for value in favor of Jurado, is a defense against a charge under the Bouncing Checks Law.
• Whether or not the presence or absence of the elements of the offense may already be determined at the preliminary investigation, such that a trial on the merits is no longer necessary.

Applicable Provisions

Section 1 of Batas Pambansa Bilang 22 provides:

SECTION 1. Checks without sufficient funds. - 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 (1) 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 Ricaforte was ordered indicted, and its phrase "to apply on account or for value" is the language around which her entire defense is built.

The same section continues:

The same penalty shall be imposed upon any person who, having sufficient funds in or credit with the drawee bank when he makes or draws and issues a check, shall fail to keep sufficient funds or to maintain a credit to cover the full amount of the check if presented within a period of ninety (90) days from the date appearing thereon, for which reason it is dishonored by the drawee bank.

This second paragraph fixes the ninety-day period within which presentment must be made, and it is the provision that governs a drawer who had funds at issuance but failed to keep them.

Ruling

On the first issue, the Court held that the Court of Appeals did not err. In a preliminary investigation, the public prosecutor merely determines whether there is probable cause — sufficient ground to engender a well-founded belief that a crime has been committed and that the respondent is probably guilty and should be held for trial. Probable cause requires more than bare suspicion but less than evidence that would justify a conviction. It does not call for the rules and standards of proof required after a trial on the merits, and the complainant need not present proof beyond reasonable doubt. Absent a clear showing of arbitrariness, credence is given to the finding of probable cause by the Secretary of Justice.

On the second issue, the Court held that the accommodation or guarantee character of the checks is not a defense. The Court laid down the three elements of the offense: first, the accused makes, draws, or issues a check to apply on account or for value; second, the accused knows at the time of issuance that he or she does not have sufficient funds in or credit with the drawee bank for payment in full upon presentment; and third, the check is subsequently dishonored 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. The gravamen of the offense is the act of making and issuing a worthless check — a check dishonored upon presentation for payment. The law punishes the act not as an offense against property but as an offense against public order. A check issued as evidence of a debt, though not intended to be presented for payment, has the same effect as an ordinary check and falls within the ambit of the law.

The Court noted that Ricaforte herself admitted issuing the checks for Aguilar's rice procurement from Jurado, which was a valuable consideration, and that a bank certification showed the checks were returned for stop payment. The mere act of issuing a worthless check — whether as a deposit, as a guarantee, or even as evidence of a pre-existing debt — is malum prohibitum, that is, wrong simply because the law forbids it, regardless of the intent behind it. The Court quoted its earlier ruling:

What the law punishes is the issuance itself of a bouncing check and not the purpose for which it was issued or of the terms and conditions relating to its issuance. The mere act of issuing a worthless check, whether merely as an accommodation, is covered by B.P. 22. Hence, the agreement surrounding the issuance of a check is irrelevant to the prosecution and conviction of the petitioner.

On the third issue, the Court held that the validity and merits of a party's defense and accusation, as well as the admissibility of testimonies and evidence, are better ventilated during trial proper than at the preliminary investigation level. A finding of probable cause does not ensure a conviction or a conclusive finding of guilt beyond reasonable doubt; the allegations will be put to the test in a full-blown trial where evidence is analyzed, weighed, given credence, or disproved.

Doctrine

A Bar candidate should retain these rules. First, the elements of violation of Section 1 of the Bouncing Checks Law are: the making, drawing, or issuing of a check to apply on account or for value; knowledge at the time of issuance of insufficient funds or credit; and subsequent dishonor for insufficiency of funds or credit, or dishonor that would have occurred but for the drawer's stop payment order without valid reason. Second, the offense is malum prohibitum: the gravamen is the mere act of making and issuing a worthless check, and the purpose or reason for issuance is inconsequential. Third, the law applies even where the dishonored check was issued merely as a deposit, a guarantee, or as evidence of a pre-existing debt. Fourth, a finding of probable cause in a preliminary investigation does not require proof beyond reasonable doubt, and the defense of accommodation is not a ground to quash the information — it is a matter for trial.

Disposition

The Supreme Court denied the petition and affirmed the decision and resolution of the Court of Appeals, so that Ricaforte must stand trial for violation of the Bouncing Checks Law.

Remember This

Memorize the line: the gravamen of the offense under the Bouncing Checks Law is the mere act of making and issuing a worthless check, and the purpose for which it was issued is irrelevant. Examiners use this case to test the malum prohibitum character of the offense, the accommodation-party defense, and the distinction between probable cause in a preliminary investigation and proof beyond reasonable doubt at trial.