Luis Wong vs Court of Appeals

written by Howard

G.R. No. 117857 – 351 SCRA 100 – Mercantile Law – Negotiable Instruments Law – Batas Pambansa 22 – Knowledge of Insufficiency 

Criminal Law – Special Penal Laws – Batas Pambansa Blg. 22 – Elements – Notice of Dishonor – Presumption of Knowledge of Insufficiency

Luis Wong is a collector of Limtong Press, Inc., a company which prints calendars. Wong was assigned to collect check payments from LPI clients. One time, six of LPI’s clients were not able to give the check payments to Wong. Wong then made arrangements with LPI so that for the meantime, Wong can use his personal checks to guarantee the calendar orders of the LPI’s clients. LPI however has a policy of not accepting personal checks of its agents. LPI instead proposed that the personal checks should be used to cover Wong’s debt with LPI which arose from unremitted checks by Wong in the past. Wong agreed. So he issued 6 checks dated December 30, 1985.

Before the maturity of the checks, Wong persuaded LPI not to deposit the checks because he said he’ll be replacing them within 30 days. LPI complied however Wong reneged on the payment. On June 5, 1986 or 157 days from date of issue, LPI presented the check to RCBC but the checks were dishonored (account closed). On June 20, 1986, LPI sent Wong a notice of dishonor. Wong failed to make good the amount of the checks within five banking days from his receipt of the notice. LPI then sued Wong for violations of Batas Pambansa Blg. 22.

Among others, Wong argued that he’s not guilty of the crime of charged because one of the elements of the crime is missing, that is, prima faciepresumption of “knowledge of lack of funds” against the drawer. According to Wong, this element is lost by reason of the belated deposit of the checks by LPI which was 157 days after the checks were issued; that he is not expected to keep his bank account active beyond the 90-day period – 90 days being the period required for the prima facie presumption of knowledge of lack of fund to arise.

ISSUE: Whether or not Wong is guilty of the crime charged.

HELD: Yes. Wong is guilty of violating BP 22. The elements of violation of BP 22 pertinent to this case are:

1. The making, drawing and issuance of any check to apply for account or for value;

2. The knowledge of the maker, drawer, or issuer that at the time of issue he does not have sufficient funds in or credit with the drawee bank for the payment of such check in full upon its presentment; and

3. The subsequent dishonor of the check by the drawee bank for insufficiency of funds or credit or dishonor for the same reason had not the drawer, without any valid cause, ordered the bank to stop payment.

Under the second element, the presumption of knowledge of the insufficiency arises if the check is presented within 90 days from the date of issue of the check. This presumption is lost, as in the case at bar, by failure of LPI to present it within 90 days. But this does not mean that the second element was not attendant with respect to Wong. The presumption is lost but lack of knowledge can still be proven, LPI did not deposit the checks because of the reassurance of Wong that he would issue new checks. Upon his failure to do so, LPI was constrained to deposit the said checks. After the checks were dishonored, Wong was duly notified of such fact but failed to make arrangements for full payment within five (5) banking days thereof. There is, on record, sufficient evidence that Wong had knowledge of the insufficiency of his funds in or credit with the drawee bank at the time of issuance of the checks.

The Supreme Court also noted that under Section 186 of the Negotiable Instruments Law, “a check must be presented for payment within a reasonable time after its issue or the drawer will be discharged from liability thereon to the extent of the loss caused by the delay.” By current banking practice, a check becomes stale after more than six (6) months, or 180 days. LPI deposited the checks 157 days after the date of the check. Hence said checks cannot be considered stale.

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