PEOPLE OF THE PHILIPPINES, PLAINTIFF-APPELLEE, VS. VIRGINIA BABY P. MONTANER, ACCUSED-APPELLANT.

People versus Montaner

The Case

This is the People of the Philippines against Virginia Baby Montaner, a criminal appeal from a conviction for estafa, swindling, under paragraph 2, letter d, of Article 315 of the Revised Penal Code — the provision on issuing a check in payment of an obligation when the drawer has no funds in the bank. The private complainant, Reynaldo Solis, parted with fifty thousand pesos in cash in exchange for ten postdated checks that later bounced because the account had been closed. The case matters because it is the clean teaching vehicle for the elements of estafa by postdating or issuing a check, and for the prima facie presumption of deceit that arises when the drawer fails to cover the check within three days from notice of dishonor.

Procedural History

Montaner was charged by Information before the Regional Trial Court of San Pedro, Laguna, Branch 93. She pleaded not guilty at arraignment and trial followed. The trial court convicted her of estafa under paragraph 2, letter d, of Article 315 and sentenced her to an indeterminate penalty of twelve years of prision mayor as minimum to twenty-two years of reclusion perpetua as maximum, and ordered her to indemnify Solis in the amount of fifty thousand pesos.

She elevated the case to the Court of Appeals, which denied the appeal and affirmed the trial court's decision in full. She then interposed this appeal before the Supreme Court, adopting her appellant's brief and raising a single assignment of error: that the trial court gravely erred in finding her guilty beyond reasonable doubt of estafa.

Facts

On the seventeenth of May 1996, in the house of Reynaldo Solis in San Pedro, Laguna, Montaner issued to him ten Prudential Bank checks, each in the amount of five thousand pesos, for a total of fifty thousand pesos, all postdated to the seventeenth of June 1996. She received their cash equivalent. According to Solis, she represented that the checks were fully funded and told him to deposit them on their due date.

When Solis deposited the checks, all of them were dishonored for the reason account closed. The bank's records showed that Montaner's account had been closed on the eleventh of July 1996, and the checks were returned on the fourth of October 1996. Solis demanded payment verbally and then through a demand letter dated the thirteenth of October 1996, which was received by Montaner's husband. She neither paid nor deposited the amount needed to cover the checks within three days from notice.

For her defense, Montaner denied issuing the checks to Solis. She claimed she lent the ten checks to one Marlyn Galope, signing them but leaving the date, amount, and payee blank so they could not be negotiated, and telling Galope the checks were unfunded. She said she learned of the case only later, and that she never received the notice of dishonor because her husband had gone abroad. She did not present Galope as a witness.

Issues

• Whether or not the prosecution established beyond reasonable doubt all the elements of estafa under paragraph 2, letter d, of Article 315 of the Revised Penal Code.
• Whether or not the failure of the drawer to deposit the amount necessary to cover the check within three days from receipt of notice of dishonor gives rise to prima facie evidence of deceit.
• Whether or not the accused's bare denial, unsubstantiated by clear and convincing evidence and uncorroborated by the witness she named, can overcome the prosecution's evidence.

Applicable Provisions

Paragraph 2, letter d, of Article 315 of the Revised Penal Code provides:

By postdating a check, or issuing a check in payment of an obligation when the offender had no funds in the bank, or his funds deposited therein were not sufficient to cover the amount of the check. The failure of the drawer of the check to deposit the amount necessary to cover his check within three (3) days from receipt of notice from the bank and/or the payee or holder that said check has been dishonored for lack or insufficiency of funds shall be prima facie evidence of deceit constituting false pretense or fraudulent act.

This is the very provision under which Montaner was charged and convicted, and its second sentence supplies the presumption of deceit that the Court applies against her.

Ruling

On the first issue, the Court held that all the elements of estafa under paragraph 2, letter d, of Article 315 were proven beyond reasonable doubt. The Court laid them out as follows: (1) the postdating or issuance of a check in payment of an obligation contracted at the time the check was issued; (2) lack of sufficiency of funds to cover the check; and (3) damage to the payee. Solis testified clearly and categorically that Montaner issued the ten postdated checks, each for five thousand pesos, in his house in exchange for their cash equivalent, and that she signed them in his presence. The checks were dishonored because the account was closed, and Solis was damaged in the amount of fifty thousand pesos. The Court stressed that Solis would not have given the cash had it not been for the issuance of the checks, which were undoubtedly issued to induce him to part with his money.

On the second issue, the Court held that Montaner's failure to comply with the demand letter, and her failure to deposit the amount necessary to cover the checks within three days from receipt of notice, gave rise to prima facie evidence of deceit, which is an element of the crime, constituting false pretense or fraudulent act under the second sentence of paragraph 2, letter d, of Article 315.

On the third issue, the Court rejected Montaner's defense. It held that evidence, to be believed, must not only proceed from the mouth of a credible witness but must be credible in itself, such as the common experience and observation of mankind can approve as probable under the circumstances. Her claim that she voluntarily parted with blank but signed checks without any suspicion they might be used to defraud anyone defies ordinary common sense and human experience. The Court also held that denial, if unsubstantiated by clear and convincing evidence, is negative and self-serving evidence with far less evidentiary value than the testimony of credible witnesses who testify on affirmative matters. Her failure to produce Galope to corroborate her story was fatal to her cause.

Doctrine

First, the elements of estafa by postdating or issuing a check under paragraph 2, letter d, of Article 315 are: the postdating or issuance of a check in payment of an obligation contracted at the time the check was issued; lack of sufficiency of funds to cover the check; and damage to the payee. Second, the drawer's failure to deposit the amount necessary to cover the check within three days from receipt of notice that the check was dishonored for lack or insufficiency of funds is prima facie evidence of deceit constituting false pretense or fraudulent act. Third, a bare and unsubstantiated denial is negative and self-serving evidence that cannot prevail over the positive and categorical testimony of credible witnesses, and the failure to present a witness who could corroborate the defense is fatal to it. Fourth, evidence to be believed must not only come from a credible witness but must be credible in itself, conforming to common experience and observation.

Disposition

The Supreme Court affirmed the decision of the Court of Appeals in full, upholding Montaner's conviction for estafa and the award of indemnity to Solis.

Remember This

Memorize the three elements of estafa under paragraph 2, letter d, of Article 315, and the three-day rule that makes failure to cover a dishonored check prima facie evidence of deceit. Examiners use this case to test the elements of estafa by check and the weight of an uncorroborated denial against positive testimony.