CASE: Yu Oh v Court of Appeals

DATE: June 6, 2003

PONENTE: Austria-Martinez, J.
Topic in Syllabus: Strict and Liberal Construction

FACTS:

Elvira Yu Oh (petitioner) bought jewelry from Solid Gold International

Traders (private respondent) but failed to pay purchase price. The company
filed civil complaints against her for specific performance with the Pasig
Regional Trial Court.
Joaquin Novales III, general manager of Solid Gold, and the petitioner entered
into a compromise agreement where petitioner was to issue ninety-nine
th
post-dated checks amounting to P50,000 each to be deposited every 15 and
th
30 of the month from Ocober 1990 to November 16, 1994. Balance of over
P1 million was to be paid in cash, lump sum, on November 16, 1994 as well.
Petioner issued 10 checks amounting to P50,000 each, drawn against her
account in Equitable Banking Corporation.
When Novales deposited the checks with Far East Bank and Trust Company,
however, checks were dishonored as the account was already closed.
October 5, 1992: Novales filed 10 separate Informations. These were
consolidated and raffled to Branch 99 of the Pasig RTC.
December 22, 1993: RTC rendered a decision finding the accused guilty
of ten counts of violation of B.P. Blg. 22, also known as the Bouncing
Checks Law. She was sentenced to one year of imprisonment for each count
and indemnification of P500.
Petitioner appealed to the Court of Appeals but the CA found it to be of no
merit and affirmed the RTCs decision.

ISSUES:
1. Did the court err in not granting retroactive effect to R.A. 7691 in view of Art.
22 of the RPC?
2. Did the appellate court err in construing B.P. Blg. 22?
3. Is the notice of dishonor to the drawer important in warranting a conviction?
RULING:

Assailed Decision and Resolution of the CA are REVERSED and SET ASIDE.
Petitioner is acquitted of the ten counts for insufficiency of evidence but is
ordered to pay P500,000 to the private respondent, with 12% interest per
annum from the date of finality of judgment.

REASONING:
1. NO. The court did not err in not granting retroactive effect to R.A. 7691.
Petitioner: That the appellate court failed to give retroactive effect to R.A.
7691 which gave the Municipal Trial Courts original jurisdiction.

R.A. 7691 is not a penal law.

Penal laws are those which define crimes and proved for their punishment.
The subject Repulic Act, defining jurisdiction, is substantive in nature.
R.A. 7691 cannot apply because jurisdiction is determined by the law in
force at the time of the filing of the complaint and once acquired, cannot
be affected by subsequent legislative enactments.

2. NO. The appellate court did not err in construing B.P. Blg. 22.
Petitioner: That because penal statutes must be strictly construed and
resolved in favor of the accused, the insufficiency of funds referred to in
B.P. Blg. 22 must not be made to cover those accounts that are closed or
declared to have no funds. Post-dated checks, not being drawn payable on
demand but rather on a fixed date, should also be considered as ordinary and
not special bills of exchange.

Lozano v Martinez: Thrust of the Bouncing Checks law is to prohibit the

making of worthless checks and putting them in circulation as their effects
directly affect public interest. Such intent is reiterated in Cueme v People
and in Recuerdo v People.
Claim on closed accounts not being included in the coverage of the B.P.
has no merit in view of the legislative intent of the law which is to protect
the interest of the community at large.
People v Nitafan: The law does not distinguish but merely provides that
any person who makes/draws and issues any check knowing that he does
not have enough funds shall be punished.

3. YES. The notice of dishonor to the drawer is important.

Petitioner: That no notice of dishonor had been given to her as drawer of the
dishonored checks, pursuant to the requirement expressly provided in B.P.
Blg. 22.

Elements for conviction of violation of B.P. Blg. 22:

a) Accused makes, draws or issues any check to apply to account or for
value.
b) Accused knows at the time of issuance that he/she does not have
sufficient funds in, or credit with, the drawee bank for payment of
the check in full upon its presentment.
c) The check is subsequently dishonored.
For liability to attach, it is not enough for prosecution to simply prove that
the checks were subsequently dishonored. Prosecution must also prove
awareness/knowledge of the accused at the time of issuance.
- Basis of Yu Ohs awareness of the lack/insufficiency was a line in her
Counter-Affidavit where she declares that she told the general manager
that the actual status of the checks that the same might not be able
to cover the amount of the said checks so stated therein [sic].
Presumption (provided in Sec. 2, B.P. Blg. 22) of knowledge cannot arise if
such notice of non-payment by the bank is not sent to the maker/drawer.
Jurisprudence has shown that notice of dishonor is vital insomuch as Sec.
2, B.P. Blg. 22 provides the drawee or maker five days in which to
come up with the needed money.

Procedural due process demands that a notice is served in order to afford

the accused the opportunity to aver prosecution.
Also, it was shown through the general managers testimony that no
personal demands were made on the petitioner prior to the complaints
being filed.
Novales also apparently knew of the possible insufficiency of funds. The
Court has ruled before that when the complainant was informed by the
drawer of such, there is no violation of B.P. Blg. 22.