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VOL. 270, MARCH 26, 1997 423

Llamado vs. Court of Appeals

*
G.R. No. 99032. March 26, 1997.

RICARDO A. LLAMADO, petitioner, vs. COURT OF

APPEALS and PEOPLE OF THE PHILIPPINES,
respondents.

Criminal Law; Bouncing Checks Law (Batas Pambansa 22);

Presumptions; Knowledge involves a state of mind difficult to
establish, thus B.P. 22 creates a prima facie presumption, i.e., that
the drawer had knowledge of the insufficiency of his funds in or
credit with the bank at the time of the issuance and on the check’s
presentment for payment.—Petitioner denies knowledge of the
issuance of the check without sufficient funds and involvement in
the transaction with private complainant. However, knowledge
involves a state of mind difficult to establish. Thus, the statute
itself creates a prima facie presumption, i.e., that the drawer had
knowledge of the insufficiency of his funds in or credit with the
bank at the time of the issuance and on the check’s presentment
for payment.

_________________

* SECOND DIVISION.

424

424 SUPREME COURT REPORTS ANNOTATED

Llamado vs. Court of Appeals

Same; Same; Corporation Law; Lack of involvement in the

negotiation for the transaction is not a defense to a treasurer of the
corporation who signed the check in his capacity as an officer of
the corporation.—Petitioner failed to rebut the presumption by
paying the amount of the check within five (5) banking days from
notice of the dishonor. His claim that he signed the check in blank
which allegedly is common business practice, is hardly a defense.

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If as he claims, he signed the check in blank, he made himself

prone to being charged with violation of BP 22. It became
incumbent upon him to prove his defenses. As Treasurer of the
corporation who signed the check in his capacity as an officer of
the corporation, lack of involvement in the negotiation for the
transaction is not a defense.
Same; Same; What the law punishes is the issuance of a
bouncing check and not the purpose for which it was issued nor the
terms and conditions relating to its issuance—the mere act of
issuing a worthless check is malum prohibitum.—True, it is
common practice in commercial transactions to require debtors to
issue checks on which creditors must rely as guarantee of
payment, or as evidence of indebtedness, if not a mode of
payment. But to determine the reason for which checks are
issued, or the terms and conditions for their issuance, will greatly
erode the faith the public reposes in the stability and commercial
value of checks as currency substitutes, and bring about havoc in
trade and in banking communities. So, what the law punishes is
the issuance of a bouncing check and not the purpose for which it
was issued nor the terms and conditions relating to its issuance.
The mere act of issuing a worthless check is malum prohibitum.
Same; Same; Novation Theory; The “novation theory” does not
apply where the offer to pay by the debtor, which was accepted by
the creditor, turned out to be only an empty promise which
effectively delayed the aggrieved party’s filing of a case for
violation of BP 22.—With regard to petitioner’s third allegation,
the “novation theory” recognized by this Court in certain cases,
does not apply in the case at bar. While private complainant
agreed to petitioner’s offer to pay him 10% of the amount of the
check on November 14 or 15, 1983 and the balance to be rolled
over for 90 days, this turned out to be only an empty promise
which effectively delayed private complainant’s filing of a case for
Violation of BP 22 against petitioner and his coaccused. As
admitted by petitioner in his Memorandum, private complainant
was never paid as agreed upon.

425

VOL. 270, MARCH 26, 1997 425

Llamado vs. Court of Appeals

Same; Same; The person or persons who actually sign the

check in behalf of a corporation, company or entity is liable under
BP 22.—Petitioner’s argument that he should not be held
personally liable for the amount of the check because it was a
check of the Pan Asia Finance Corporation and he signed the

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same in his capacity as Treasurer of the corporation, is also

untenable. The third paragraph of Section 1 of BP Blg. 22 states:
“Where the check is drawn by a corporation, company or entity,
the person or persons who actually signed the check in behalf of
such drawer shall be liable under this Act.”

PETITION for review on certiorari of a decision of the

Court of Appeals.

The facts are stated in the opinion of the Court.

       Ambrosio Padilla, Mempin & Reyes Law Offices for
petitioner.
     The Solicitor General for respondents.

TORRES, JR., J.:

1
Before us is a petition to review the decision of the Court of
Appeals which affirmed the decision of the Regional Trial
Court of Manila in Criminal Case No. 85­38653 convicting
petitioner of Violation of Batas Pambansa Blg. 22,
otherwise known as the Bouncing Checks Law, and
sentencing him to suffer imprisonment of one (1) year of
prision correccional and to pay a fine of P200,000.00 with
subsidiary imprisonment in case of insolvency, and to
reimburse Leon Gaw the amount of P186,500.00 plus the
costs of suit.
The facts of the case, as found by the Court of Appeals,
are as follows:

“Accused­appellant, Ricardo Llamado, together with Jacinto

Pascual, was charged with violation of Batas Pambansa Blg. 22
and pleaded “not guilty” of the crime charged.

__________________

1 Penned by Justice Fernando A. Santiago, concurred in by Justices

Rodolfo A. Nocon and Pedro A. Ramirez.

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426 SUPREME COURT REPORTS ANNOTATED

Llamado vs. Court of Appeals

“Accused Jacinto Pascual remained at large. Thus trial on the

merits was conducted against accused­appellant, Ricardo
Llamado, only.
“Accused Ricardo Llamado and his co­accused Jacinto Pascual
were the Treasurer and President, respectively, of the Pan Asia
Finance Corporation. “As found by the trial court, private
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complainant, Leon Gaw, delivered to accused the amount of

P180,000.00, with the assurance of Aida Tan, the secretary of the
accused in the corporation, that it will be repaid on 4 November
1983, plus interests thereon at 12% plus a share in the profits of
the corporation, if any.
“Upon delivery of the money, accused Ricardo Llamado took it
and placed it inside a deposit box. Accused Jacinto Pascual and
Ricardo Llamado signed Philippine Trust Company Check No.
047809, postdated 4 November 1983, in the amount of
P186,500.00 in the presence of private complainant. The aforesaid
check was issued in payment of the cash money delivered to the
accused by private complainant, plus interests thereon for sixty
(60) days in the amount of P6,500.00.
“On 4 November 1983, private complainant deposited the check
in his current account with the Equitable Banking Corporation
which later informed the complainant that said check was
dishonored by the drawee bank because payment was stopped,
and that the check was drawn against insufficient funds. Private
complainant was also notified by the Equitable Banking
Corporation that his current account was debited for the amount
of P186,500.00 because of the dishonor of the said check.
“Private complainant returned to Aida Tan to inform her of the
dishonor of the check. Aida Tan received the check from private
complainant with the assurance that she will have said check
changed with cash. However, upon his return to Aida Tan, the
latter informed him that she had nothing to do with the check.
“Thereupon, private complainant went to accused Ricardo
Llamado on 11 November 1983 to inform him of the dishonor of
the check. Accused offered in writing to pay private complainant a
portion of the amount equivalent to 10% thereof on 14 or 15
November 1983, and the balance to be rolled over for a period of
ninety (90) days. This offer was accepted by private complainant.
“Accused, however, failed to remit to private complainant the
aforesaid 10% on or before 15 November 1983 and to roll over the
balance of the money.

427

VOL. 270, MARCH 26, 1997 427

Llamado vs. Court of Appeals

“Private complainant then demanded from the accused the

payment of P186,500.00 but accused failed to pay and instead,
accused offered to return to private complainant only 30% of his
money which was refused by the latter. Thus, the filing of the
complaint2 for violation of Batas Pambansa No. 22 against the
accused.”

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On the other hand, petitioner’s version of the relevant

facts, is as follows:

“It was the practice in the corporation for petitioner to sign blank
checks and leave them with Pascual so that Pascual could make
disbursements and enter into transactions even in the absence of
petitioner.
“One of the checks which petitioner signed in blank and gave to
Pascual is the check in question, Exhibit “A.”
“The check was later issued to private complainant, filled up
with the amount P186,500.00 and dated November 4, 1983.
“The check was dishonored on November 7, 1983 when private
complainant presented it for payment because its payment had
been stopped (Exhibits A­6 and A­7). However, there were also no
sufficient funds in the account to cover the amount of the check.
“Private complainant went to see Aida Tan, the ‘Secretary’ of
Pan­Asia Finance Corporation, about the dishonor of the check
because ‘she was the one who handled [sic] the check and gave it
to me.’ He returned the check to Aida Tan who gave him a receipt
for it (Exhibit C), and promised ‘to return the cash money.’
However, she did not do so. Instead, she returned the check to
private complainant (pp. 9­11, tsn, January 6, 1986; p. 9, tsn,
January 6, 1986).
“On November 11, 1983, private complainant entered into an
agreement (Exhibit H) with petitioner whereby Pan­Asia Finance
Corporation would pay private complainant 10% of the
P186,500.00 by November 14, or 15, and the balance will be rolled
over for 90 days (pp. 1­4, tsn, June 30, 1986). Private respondent
was not however paid as agreed upon.
“In late 1985, petitioner was charged3
with violation of BP 22
under the following Information: x x x”

_____________________

2 Court of Appeals Decision, pp. 1­2; Rollo, pp. 26­27.

3 Memorandum for petitioner, pp. 5­6; Rollo, pp. 141­142.

428

428 SUPREME COURT REPORTS ANNOTATED

Llamado vs. Court of Appeals

After trial on the merits, the trial court rendered judgment

convicting the accused of violation of Batas Pambansa No.
22, the dispositive portion of which reads:

“WHEREFORE, judgment is hereby rendered finding the Accused

Ricardo A. Llamado guilty of Violation of Batas Pambansa No. 22

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and hereby sentences him to suffer imprisonment for a period of

one (1) year of prision correccional and to pay a fine of
P200,000.00, with subsidiary imprisonment in case of insolvency.
The Accused is likewise condemned to reimburse Leon Gaw the
aforesaid amount of P186,500.00 plus the costs of suit.
SO ORDERED.”

On appeal, the Court of Appeals affirmed the trial court’s

decision.
In this petition, petitioner alleges that:

1. respondent Court of Appeals erred because it

convicted petitioner of the charge of violation of
Batas Pambansa Blg. 22 although the check was
only a contingent payment for investment which
had not been proven to be successful, thus the check
was not issued “to apply on account or for value”
within the contemplation of the batas;
2. respondent Court of Appeals erred because it
convicted petitioner of the charge for merely signing
the check in question without being actually
involved in the transaction for which the check was
issued, in disregard of the pronouncement of this
Court in Dingle vs. IAC, 148 SCRA 595;
3. respondent Court of Appeals erred because it
refused to apply the “novation theory” recognized by
this Court in Ong v. Court of Appeals, 124 SCRA
578, and Guingona, Jr. v. City Fiscal of Manila, 128
SCRA 577, despite admission by private
complainant that before the charge was filed in
court or even the prosecutor he had entered into a
new agreement with petitioner supplanting the
check in question;
4. respondent Court of Appeals erred because it held
petitioner personally liable for the amount of the
check in question, although it was a check of the
Pan Asia Finance Corporation and he signed the
same in his capacity as Treasurer of the
corporation.

The petition is without merit.

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Llamado vs. Court of Appeals

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For clarity, petitioner’s second allegation shall be discussed

first. Petitioner argues that respondent court erred 4
in
disregarding the pronouncement in Dingle vs. IAC, that
“absent knowledge by the maker or drawer of the issuance
of a check much less of the transaction and the fact of
dishonor, the accused should be acquitted.”
The respondent court did not err. In Dingle vs. IAC, the
petitioner was acquitted because: 1.) from the testimony of
the sole prosecution witness, it was established that he
dealt exclusively with petitioner’s co­signatory; 2.) nowhere
in the prosecution witness’ testimony was the name of
petitioner ever mentioned in connection with the
transaction and the issuance of the check; and, 3.) the
prosecution witness therein categorically stated that it was
Nestor Dingle, petitioner’s cosignatory who received his
two letters of demand. These lent credence to the testimony
of petitioner that she signed the questioned checks in blank
together with her husband without any knowledge of its
issuance, much less of the transaction and the fact of
dishonor. Moreover, while Paz Dingle and her husband
Nestor Dingle owned the business, the business was
managed by Nestor, petitioner Paz’s co­signatory.
The above circumstances in Dingle vs. IAC do not obtain
in the case at bar. Here, the private complainant testified
that upon delivery of the money, petitioner took it and
placed it inside a deposit box; that Jacinto Pascual and
petitioner Ricardo Llamado signed the questioned check,
postdated November 4, 1983, in the amount of P186,500.00
in the presence of private complainant; notice of the fact of
dishonor of5 the check was made on petitioner, who offered
in writing to pay private complainant a portion of the
amount equivalent to 10% thereof on 14 or 15 November
1983, and the balance to be rolled over for a period of 90
days.
Petitioner denies knowledge of the issuance of the check
without sufficient funds and involvement in the transaction
with private complainant. However, knowledge involves a

____________________

4 March 16, 1987, L­75243, 148 SCRA 595.

5 Exh. “H,” Original Record, p. 29.

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Llamado vs. Court of Appeals

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state of mind difficult to establish. Thus, the statute itself

creates a prima facie presumption, i.e., that the drawer had
knowledge of the insufficiency of his funds in or credit with
the bank at the time of the 6
issuance and on the check’s
presentment for payment. Petitioner failed to rebut the
presumption by paying the amount of the check7 within five
(5) banking days from notice of the dishonor. His claim
that he signed the check in blank which allegedly is
common business practice, is hardly a defense. If as he
claims, he signed the check in blank, he made himself
prone to being charged with violation of BP 22. It became
incumbent upon him to prove his defenses. As Treasurer of
the corporation who signed the check in his capacity as an
officer of the corporation, lack of involvement in the
negotiation for the transaction is not a defense.
Petitioner alleges that the respondent court erred when
it convicted petitioner of violation of BP 22 when the check
was only a contingent payment for investment which had
not been proven to be successful, thus the check was not
issued “to apply on account or for value” within the
contemplation of the batas. This contention is untenable.
The check was issued for an actual valuable
consideration of P180,000.00, which private complainant
handed to Aida Tan, a secretary in petitioner’s office. In
fact, petitioner admits that private complainant made an
investment in said amount with Pan­Asia Finance
Corporation. Petitioner contends that the money which
private complainant gave the corporation was intended for
investment which they agreed will be returned to private
complainant with interests, only if the project became
successful. But then, if this were true, the check need not
have been issued because a receipt and their written
agreement would have sufficed.

___________________

6 Lozano vs. Martinez, et al., December 18, 1986, L­63419, 146 SCRA
323; Significant Issues Involving the Bouncing Checks Law, 156 SCRA
349.
7 Ibid.

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Llamado vs. Court of Appeals

True, it is common practice in commercial transactions to

require debtors to issue checks on which creditors must
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rely as guarantee of payment, or as evidence of

indebtedness, if not a mode of payment. But to determine
the reason for which checks are issued, or the terms and
conditions for their issuance, will greatly erode the faith
the public reposes in the stability and commercial value of
checks as currency substitutes, and bring
8
about havoc in
trade and in banking communities. So, what the law
punishes is the issuance of a bouncing check and not the
purpose for which it was issued nor the terms and
conditions relating to its issuance. The 9mere act of issuing
a worthless check is malum prohibitum.
With regard to petitioner’s third allegation, the
“novation theory” recognized by this Court in certain cases,
does not apply in the case at bar. While private
complainant agreed to petitioner’s offer to pay him 10% of
the amount of the check on November 14 or 15, 1983 and
the balance to be rolled over for 90 days, this turned out to
be only an empty promise which effectively delayed private
complainant’s filing of a case for Violation of BP 22 against
petitioner and his co­accused. As admitted by petitioner in
his Memorandum, private complainant was never paid as
agreed upon.
Petitioner’s argument that he should not be held
personally liable for the amount of the check because it was
a check of the Pan Asia Finance Corporation and he signed
the same in his capacity as Treasurer of the corporation, is
also untenable. The third paragraph of Section 1 of BP Blg.
22 states:

“Where the check is drawn by a corporation, company or entity,

the person or persons who actually signed the check in behalf of
such drawer shall be liable under this Act.”

___________________

8 People vs. Nitafan, etc., et al., October 22, 1992, G.R. No. 75954, 215
SCRA 79; Notes and Comments on the Bouncing Checks Law, by Judge
David Nitafan.
9 Cruz vs. Court of Appeals, June 17, 1994, G.R. No. 108738, 233 SCRA
301.

432

432 SUPREME COURT REPORTS ANNOTATED

People vs. Gomez

IN VIEW WHEREOF, the petition is hereby DENIED and

the decision of respondent court AFFIRMED in toto.
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SO ORDERED.

     Regalado (Chairman), Romero, Puno and Mendoza,

JJ., concur.

Petition denied, judgment affirmed in toto.

Notes.—Foreign checks, provided they are either drawn

and issued in the Philippines though payable outside
thereof, are within the coverage of the Bouncing Checks
Law. (De Villa vs. Court of Appeals, 195 SCRA 722 [1991])
The gravamen of the offense defined by B.P. 22 is
knowingly issuing a worthless check. (Lim vs. Court of
Appeals, 251 SCRA 408 [1995]).

——o0o——

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