Holder in due course

Is the drawer of a bouncing check criminally liable even if he did not receive the amount of the check he issued? This is the question resolved in this case of Nick.

Nick was a businessman in a Southern Tagalog town who had quite a good reputation especially with other commercial establishments like the grocery store owned by Letty. Also known to Letty as a regular customer was Ruby, another businesswoman dealing in jewelries. One time Ruby went to Letty in her grocery store and asked the latter to rediscount postdated check in the amount of P55,000.00 drawn by Nick against his account with the local branch of PS Bank. Ruby told Letty that Nick asked her to rediscount said check for him as he needed the money. Considering that both Nick and Ruby were long time customers of her store and she knew Nick to be a good man, Letty agreed to rediscount the check. So, after Ruby endorsed the check, Letty gave her the amount of P55,000.00. But when Letty deposited the check to her account in her bank on due date of the check, it was dishonored by PS Bank for the reason, "account closed" stamped at the dorsal portion although even before the account was closed, its balance was only P2,414.96. Letty then informed Ruby of the dishonor of the check and demanded the return of her P55,000.00. Ruby advised Letty to see Nick as she was only requested by Nick to have the check rediscounted. When Letty talked to Nick, the latter told her that Ruby borrowed the check from him.

A subsequent confrontation ensued among Letty, Ruby, NIck and the latter’s wife Annie first before Letty’s lawyer then at the office of the barangay captain. Letty showed Nick and Annie a photocopy of the check and they admitted to her that they owned the check but pointed to Ruby as the one liable. Annie told Ruby that she should be the one to pay since the P55,000.00 was with her, but the latter insisted that the said amount was in payment of the pieces of jewelry Annie purchased from her. Because of the impasse, an information for violation of the bouncing checks law was filed against Nick upon complaint of Letty.

For his defense during the trial, Nick changed his tune. He denied having issued said check which he previously said was borrowed by Ruby. He said it was part of the four blank checks lost by his wife when they changed residence. He reported the loss to the bank only after Letty demanded refund of the P55,000.00 from his wife. He said that he did not receive the P55,000.00 from Ruby.

The lower court still convicted him and sentenced him to suffer imprisonment of one year and to pay Letty the P55,000.00. The Court of Appeals (CA) affirmed the decision of the lower court with modification as to the penalty only. Nick questioned this decision. He asserted that the CA gravely erred in affirming the decision of the lower court since there is no evidence that he issued or affixed his signature on the checfk. And even assuming that he issued the check, the prosecution failed to prove that it was issued for valuable consideration and that he received the P55,000.00 from Ruby.

Was Nick correct?

No.

It is established that Nick issued the check. When Letty talked to him upon Ruby’s suggestion, he admitted that he gave the check to Ruby and claimed that the latter "borrowed the check" from him. Also when Letty showed the photocopy of the check to Nick and his wife, they admitted to Letty that they owned the check.

Nick cannot escape criminal liability by denying that he received the amount of P55,000.00 from Ruby after he issued the check to her. The gravamen of the offense punished by BP22 is the act of making and issuing a worthless check or a check that is dishonored upon presentation for payment. It is not the non-payment of the obligation that the law punishes. The law is not intended or designed to coerce a debtor to pay his debt. The law punishes the act not as an offense against property but as an offense against public order.

Letty rediscounted the check and gave P55,000.00 to Ruby after the alter endorsed the same. As such, Letty is a holder in due course. Under Section 28 of the Negotiable Instruments Law (NIL), absence or failure of consideration is a matter of defense only as against any person not a holder in due course. Moreover Section 24 of the NIL provides the presumption of consideration. Such presumption cannot be overcome by Nick’s bare denial of receipt of the amount of P55,000.00 from Ruby. So the decision of the CA is correct (Bayani vs. People of the Philippines G. R. No. 154947 August 11, 2004)

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