Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 163662               February 25, 2015

PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee,

vs.
JULIE GRACE K. VILLANUEVA, Accused-Appellant.

DECISION

BERSAMIN, J.:

Under review is the decision promulgated on May 25, 2004,  whereby the
1

Court of Appeals (CA) affirmed with modification the judgment rendered on

January 24, 2002 by the Regional Trial Court (RTC), Branch 60, in Makati
City convicting Julie Grace K. Villanueva of estafa as defined and penalized
under Article 315, paragraph 2 (d) of the Revised Penal Code.  The decre-
2

tal portion of the assailed decision reads:

WHEREFORE, the decision appealed from convicting accused-appellant

Julie Grace K. Villanueva of estafa under Article 315, paragraph 2(d) of the
Revised Penal Code is AFFIRMED, with MODIFICATION as to the penalty
imposed as hereinabove indicated. The Resolution of January 15, 2004
granting her bail pending appeal is REVOKED and her profferred bail bond
is REJECTED. Pursuant to Section 13, second paragraph, Rule 124 of the
2000 Revised Rules of Criminal Procedure, the case, inclusive of the entire
record thereof, is CERTIFIED and ELEVATED to the Supreme Court for re-
view. Costs against the accused-appellant.

SO ORDERED. 3

Antecedents

Villanueva stands charged with estafa as defined and penalized under Arti-
cle 315, paragraph 2 (d), of the Revised Penal Code under the information
that reads:
That on or about the 16th day of August 1994, in the City of Makati, Philip -
pines and within the jurisdiction of this Honorable Court, the above-named
accused, did then and there willfully, unlawfully and feloniously by means of
deceit, false pretenses and fraudulent acts executed prior to or simultane-
ously with the commission of the fraud, following PNB checks, [to] wit:

Check No. Date Amount

31526 9-02-94 ₱185,000.00
31527 9-17-94 185,000.00
31528 10-02-94 185,000.00
31529 10-17-94 185,000.00
31532 9-16-94 85,000.00
31533 10-16-94 85,000.00
31534 11-16-94 85,000.00

as payment for various jewelries (sic) purchased to (sic) the said com-
plainant, the accused well knowing that at the time of issue thereof, the
said checks have no sufficient funds in or credit with the drawee bank to
cover the amount of the said checks, neither will said checks be honored or
paid upon presentment, the bank dishonored and returned the said checks
for the reason "account closed" or "stopped payment" or should have been
dishonored for insufficiency of funds had not the said accused, without any
valid reason, ordered her drawee bank to stop payment and despite re-
peated demands accused failed and refused to deposit the amount neces-
sary to cover the aforesaid check or to pay the value thereof, to the dam-
age and prejudice of the said complainant in the aforesaid amounts.

CONTRARY TO LAW. 4

Version of the Prosecution

In August 1994, Loreto Madarang met Villanueva through a townmate. The

latter was interested in buying jewelry. Being then engaged in the business
of selling jewelry, Madarang went to Villanueva's residence at the Galeria
de Magallanes, and was able to sell to Villanueva five sets of jewelry worth
₱1,010, 000. 00.  Villanueva made out nine checks drawn against Philip-
5

pine National Bank (PNB), eight of which were postdated. Villanueva

signed a receipt reading as follows:6

August 16, 1994

Received from MRS. LORETO A. MADARANG the following jewelries (sic)

with the corresponding amount

1 set diamond - ₱70,000

1 set South Sea Black
w/ necklace & bracelet - 220,000
1 set heart shape diamond
w/ pendant (4.56 cts) - 450,000
1 set marquee xxx dia. 2 cts. - 220,000
1 bracelet diamond - 50,000
₱1,010,000

paid by the following checks issued by me

PNB #031501 - August 6, 1994 ₱5,000

PNB #031531 - August 19, 1994 10,000
PNB #031526 - Sept. 2, 1994 185,000
PNB #031527 - Sept. 17, 1994 185,000
PNB #031528 - Oct. 2, 1994 185,000
PNB #031529 - Oct. 17, 1994 185,000
PNB #031532 - Sept. 16, 1994 85,000
PNB #031533 - Oct. 16, 1994 85,000
 PNB #031534 - Nov. 16, 1994 85,000
₱1,010,000

with a total of One Million Ten Thousand pesos.

(sgd)
JULIE GRACE K. VILLANUEVA

Madarang received the checks because of Villanueva's assurance that they

would all be honored upon presentment.  However, the drawee bank paid
7

only PNB Check No. 031501 and PNB Check No. 131531, the remaining
seven checks being dishonored either by reason of Account Closed or
Drawn Against Insufficient Funds.  Madarang tried to call and see Vil-
8

lanueva at her residence to inform her of the dishonored checks, but

Madarang was barred by security guards from reaching Vil-
lanueva.  Madarang resorted to sending demand letters, but her effort to
9

contact Villanueva proved futile.  After Villanueva did not settle her obliga-
10

tions, Madarang brought the criminal complaint for estafa,  and the corre-
11

sponding information for estafa was ultimately filed in court on September

4, 1995. On arraignment, Villanueva pleaded not guilty. 12

Version of the Defense

Villanueva denied the accusation. She claimed that she met Madarang
three times. The first was at the residence of Cheng Diaz Davis, where
Madarang was then selling jewelry. The second time was at her residence
in the Galeria de Magallanes where Madarang arrived without prior notice
at around 7:00 or 7:30 in the evening. Madarang was persistent that Vil-
lanueva buy jewelry on credit, and even assured Villanueva that she could
replace the same if she was dissatisfied with her purchase. Madarang pre-
vailed on Villanueva to buy six pieces of jewelry, for which she issued six
checks as payment, five of which were postdated. On August 16, 1994, Vil-
lanueva saw Madarang for the last time to have the jewelry replaced. Vil-
lanueva retrieved the checks she had previously issued and replaced them
with another set of postdated checks that were the subject of the criminal
case against her. Villanueva maintained that the second set of checks were
issued as guarantee under the agreement that they were not to be de-
posited until Villanueva advised Madarang of the sufficiency of funds in her
account. Villanueva insisted that she did not receive any notice from
Madarang regarding the dishonor of the checks.  Ruling of the RTC
13

On January 24, 2002, the RTC rendered its judgment finding Villanueva
guilty as charged,  viz:
14

WHEREFORE, in view of the foregoing this Court finds accused Julie

Grace K. Villanueva GUILTY of the crime of estafa as punished under Art.
315 par. 2( d) of the Revised Penal Code in relation to Presidential Decree
No. 818, said crime having been committed in the manner described in the
information filed on September 4, 1995.

As a consequence of this judgment, accused shall suffer the penalty of

punishment for a period of Fourteen Years Eight Months and One Day to
Twenty Years which is within the range of Reclusion Temporal in its
medium and maximum periods.

She is also ordered to pay the private complainant Mrs. Loreto Madarang
the sum of Nine Hundred Ninety Five Thousand Pesos (₱995,000.00) plus
interest at the legal rate of 12% per annum until the mount is fully paid with
said interest accruing at the time the information was filed on or October
25, 1995.

The period of accused's detention shall be credited in her favor con-

formably with Art. 29 of the Revised Penal Code.

She shall serve her entire sentence at the Correccional Institute for Women
at Mandaluyong City.

SO ORDERED. 15

Decision of the CA

On appeal, the CA affirmed the conviction but differed on the application of

the Indeterminate Sentence Law, to wit:

Nonetheless, the indeterminate penalty imposed by the trial court, which is

14 years, eight (8) months and one (1) day to twenty (20) years, both of
reclusion temporal, is erroneous. Said court did not pay obeisance to the
teaching of People v. Hernando, viz:
Presidential Decree No. 818 provides:

"SECTION 1. Any person who shall defraud another by means of false pre-
tenses or fraudulent acts as defined in paragraph 2(d) of Article 315 of the
Revised Penal Code, as amended by Republic Act No. 4885, shall be pun-
ished by:

1st. The penalty of reclusion temporal of the amount of fraud is over 12,000
pesos but does not exceed 22,000 pesos, and if such amount exceeds the
latter sum, the penalty provided in this paragraph shall be imposed in its
maximum period, adding one year for each additional 10,000 pesos but the
total penalty which may be imposed shall in no case exceed thirty years. In
such cases, and in connection with the accessory penalties which may be
imposed under the Revised Penal Code, the penalty shall be termed reclu-
sion perpetua;

x x x x."

"x x x x

Hence, if the amount of the fraud exceeds twenty two thousand pesos, the
penalty of reclusion temporal is imposed in its maximum period, adding one
year for each additional ten thousand (₱10,000.00) pesos but the total
penalty shall not exceed thirty (30) years, which shall be termed reclusion
perpetua. As used herein, reclusion perpetua is not the prescribed penalty
for the offense. It merely describes the penalty actually imposed on account
of the amount of the fraud involved, which exceeds twenty two thousand
(₱22,000.00) pesos.

"Under the Indeterminate Sentence Law, if the offense is punished by the

Revised Penal Code, such as estafa, the court shall sentence the accused
to an indeterminate penalty, the maximum term of which shall be that
which, in view of the attending circumstances, could be properly imposed
under the rules of the Revised Penal Code, and the minimum term of which
shall be within the range of the penalty next lower to that prescribed by the
Code for the offense." "The penalty next lower should be based on the
penalty prescribed by the Code for the offense, without first considering any
modifying circumstance attendant to the commission of the crime. The de-
termination of the minimum penalty is left by law to the sound discretion of
the court and it can be anywhere within the range of the penalty next lower
without any reference to the periods into which it might be subdivided. The
modifying circumstances are considered only in the imposition of the maxi-
mum term of the indeterminate sentence." Here, complainant was de-
frauded in the amount of seven hundred [thousand] (₱700,000.00) pesos.
The fact that the amount involved in the instant case exceeds ₱22,000.00
should not be considered in the initial determination of the indeterminate
penalty; instead the matter would be so taken as analogous to modifying
circumstances in the imposition of the maximum term of the full indetermi-
nate sentence. This accords with the rule that penal laws are construed in
favor of the accused.

Applying the above-cited provision, accused shall be meted an indetermi-

nate sentence, the maximum of which shall be taken from the maximum
period of the basic penalty, that is, reclusion temporal, to be imposed in its
maximum period, plus one (1) year for each additional ₱10,000.00 of the
amount of the fraud, but the total penalty shall not exceed thirty (30) years.
On the other hand, the minimum of the indeterminate sentence shall be
within the range of the penalty next lower in degree to that prescribed by
the Code for the offense, without first considering any modifying circum-
stance nor the incremental penalty for the amount of the fraud in excess of
twenty two thousand (₱22,000.00) pesos. Such penalty is prision mayor,
with a duration of six ( 6) years and one ( 1) day to twelve (12) years."

Accordingly, the accused-appellant in the case at bar should be, as she is

hereby, sentenced to suffer the penalty of EIGHT (8) YEARS and ONE (1)
DAY of prision mayor, as minimum, to THIRTY (30) YEARS of reclusion
perpetua as maximum.

x x x x. 16

The CA then certified the case to the Court pursuant to Section 13 of Rule
124, Rules of Court.

Issues

Villanueva submits the following errors for our consideration:

THE LOWER COURT ORA VEL Y ERRED IN FINDING ACCUSEDAP-

PELLANT GUILTY BEYOND REASONABLE DOUBT OF THE CRIME
CHARGED.
 II

THE LOWER COURT ORA VEL Y ERRED IN NOT GIVING FULL CRE-
DENCE TO THE DEFENSE OF ACCUSED-APPELLANT.

III

WHETHER THERE WAS FRAUD PRIOR TO OR SIMULTANEOUS WITH

THE ISSUANCE OF THE SUBJECT POST-DATED CHECKS.

IV

WHETHER THE ACCUSED APPELLANT IS GUILTY, BEYOND REASON-

ABLE DOUBT, OF EST AF A. 17

Villanueva insists on the absence of fraud when she drew the postdated
checks, averring that: (a) the checks were issued as replacement; (b) the
checks could only be deposited or encashed after Madarang was notified of
the sufficiency of funds; and (c) the receipt presented by the Prosecution
failed to embody the real intention of the parties.  She argues that estafa
18

under paragraph 2( d), Article 315 of the Revised Penal Code was not com-
mitted because the checks were not executed prior to or simultaneous with
the alleged fraud; and because Madarang had instigated her to issue the
checks.19

Did Villanueva commit estafa punishable under Article 315, paragraph 2(d),
of the Revised Penal Code in issuing the seven postdated checks?

Ruling of the Court

We affirm the conviction.

Article 315, paragraph 2(d), of the Revised Penal Code provides:

Article 315. Swindling (estafa) - Any person who shall defraud another by
any of the means mentioned hereinbelow x x x:

xxxx

2. By means of any of the following false pretenses or fraudulent acts exe-

cuted prior to or simultaneously with the commission of the fraud:
 xxxx

(d) 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.

The estafa charged in the information may be committed, therefore, when:

(1) the offender has postdated or issued a check in payment of an obliga-
tion contracted at the time of the postdating or issuance; (2) at the time of
postdating or issuance of said check, the offender has no funds in the
bank, or the funds deposited are not sufficient to cover the amount of the
check; and (3) the payee has been defrauded.  The deceit should be the
20

efficient cause of the defraudation, and should either be prior to, or simulta-
neous with, the act of the fraud.
21

All the elements of estafa were present. The first element was admitted by
Villanueva, who confirmed that she had issued the checks to Madarang in
exchange for the jewelry she had purchased. There is no question that
Madarang accepted the checks upon the assurance of Villanueva that they
would be funded upon presentment. It is clear that Madarang would not
have parted with and entrusted the pieces of valuable jewelry to Villanueva
whom she barely knew unless Villanueva gave such assurance to her. The
second element was likewise established because the checks were dishon-
ored upon presentment due to insufficiency of funds or because the ac-
count was already closed. The third element was also proved by the show-
ing that Madarang suffered prejudice by her failure to collect from Vil-
lanueva the balance of ₱995,000.00.

In her defense, Villanueva adverts to an agreement with Madarang

whereby the latter would deposit or encash the checks only after being in-
formed of the sufficiency of funds in Villanueva's account. Villanueva posits
that the receipt the Prosecution presented in evidence did not embody such
agreement.
This defense of Villanueva is actually anchored on the rule that estafa will
not lie when the parties waive the negotiable character of the check, and in-
stead treat the same as proof of an obligation. For instance, when there is
an agreement between the parties at the time of the issuance and postdat-
ing of the checks that the obligee shall not encash or present the same to
the bank, the obligor cannot be prosecuted for estafa because the element
of deceit is lacking. When the payee was informed that the checks are not
covered by adequate funds, bad faith or estafa shall not arise. 22

Villanueva does not impress. Her defense crumbles because she did not
present proof of the supposed agreement.  The receipt signed by her
1âwphi1

proved the transaction and her issuance of the postdated checks by listing
the items bought and the postdated checks issued as payment. If the par-
ties really agreed for Madarang to deposit the checks only after notice of
the sufficiency of funds, then such agreement should have been incorpo-
rated in the receipt as an integral part of the transaction, or simply written in
another document with Madarang's express conformity for Villanueva's pro-
tection. We simply cannot accept that Villanueva signed the receipt despite
not including the supposed agreement that would shield her from probable
criminal prosecution. In that regard, her being a businesswoman  presum-
23

ably made her aware of the consequences of issuing unfunded checks.  All 24

that she is claiming here is that the receipt did not express the true inten-
tion of the parties, implying that no written document substantiated her al-
leged defense. She did not claim at all that she had been coerced or intimi-
dated into signing the receipt as written. Her self-serving statements on the
agreement were entirely inadequate to establish her assertions, for they
were not proof. 25

Under Article 315 2(d) of the Revised Penal Code, as amended by P.D.
818, the penalty for estafa when the total value of the checks exceed
₱22,000.00 is reclusion temporal in its maximum period (i.e., 17 years, four
moths and one day to 20 years), plus one year for each additional Pl0,000.
Applying the Indeterminate Sentence Law, the minimum term shall be from
six years and one day to 12 years of prision mayor. In imposing the indeter-
minate sentence of eight years and one day of prision mayor, as minimum,
to thirty years of reclusion perpetua as maximum, the CA correctly applied
the Indeterminate Sentence Law. It is well to state that reclusion perpetua
merely describes in this instance the penalty actually imposed on account
of the amount of the fraud involved. 26
We note, however, that the CA affirmed the imposition by the RTC of 12%
interest accruing from the time that the information was filed until the full
satisfaction of the obligation in the amount of ₱995,000.00. Conformably
with the ruling in Nacar v. Gallery Frames  applying Resolution No. 796 of
27

the Bangko Sentral ng Pilipinas Monetary Board (BSP-MB), said amount

should earn interest of 12% per annum from the filing of the information on
September 4, 1995 until June 30, 2013, and interest of 6% per annum from
July 1, 2013 until its full satisfaction. WHEREFORE, the Court AFFIRMS
the decision promulgated on May 25, 2004 by the Court of Appeals, subject
to the MODIFICATION that the amount of ₱995,000.00 shall earn interest
12% per annum from the filing of the information on September 4, 1995 un-
til June 30, 2013, and interest of 6% per annum from July 1, 2013 until its
full satisfaction.

The petitioner shall pay the costs of suit.

SO ORDERED.

LUCAS P. BERSAMIN
Associate Justice

WE CONCUR:

MARIA LOURDES P.A. SERENO

Chief Justice

TERESITA J. LEONARDO-DE CAS-

JOSE PORTUGAL PEREZ
TRO
Associate Justice
Associate Justice

ESTELA M. PERLAS-BERNABE
Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified

that the conclusions in the above Decision were reached in consultation be-
fore the case was assigned to the writer of the opinion of the Court.
MARIA LOURDES P.A. SERENO
Chief Justice

Footnotes

 Rollo, pp. 29-46; penned by Court of Appeals Associate Justice Salvador

1

J. Valdez, Jr. (retired/deceased), with Associate Justice Rebecca De Guia-

Salvador (retired) and Associate Justice Fernanda Lampas Peralta
concurring.
2
 RTC records, pp. 300-307.
3
 CA rollo, p. 169.
4
 RTC records, p. 1.
5
 TSN dated March 21, 2001, pp. 4-8.
6
 RTC records, p. 271.
7
 TSN dated March 21, 2001, pp. 8-9.
8
 Exhibits B to H, inclusive; RTC records, pp. 272-274.
9
 TSN dated March 21, 2001, pp. 9-10.
10
 Exhibits I and J; RTC records, pp. 275-277.
11
 RTC records, pp. 5-7.
12
 RTC records, p. 41.
13
 TSN dated July 25, 2001, pp. 3-15.
14
 RTC records, pp. 300-307.
15
 RTC records, pp. 306-307.
16
 CA rollo, pp. 40-42.
17
 Rollo, pp. 23-24.
18
 CA rollo, pp. 48-49.
19
 Rollo, pp. 24-26.

 People v. Juliano, G.R. No. 134120, January 17, 2005, 448 SCRA 370,
20

379.
21
 Reyes, Revised Penal Code, Book II (2006), p. 784.

 Pacheco v. Court of Appeals, G.R. No. 126670, December 2, 1999, 319

22

SCRA 595, 605-606.

23
 TSN dated July 25, 2001, p. 3.

 Chua v. People, G.R. Nos. 150926 and 150930, March 6, 2006, 484
24

SCRA 161, 168.

 Liana v. Court of Appeals, G.R. No. 104802, July 11, 2001, 361 SCRA
25

27, 34.
26
 Dy v. People, G.R. No. 158312, November 14, 2008, 571SCRA59, 81.
27
 G.R. No. 189871, August 13, 2013, 703 SCRA 439.