Facts
Spouses Carlos purchased tires from Tire Star, Inc. on installment and issued six post-dated checks as payment, which were later dishonored by the bank for “Account Closed.” Tire Star’s representative, Ruth Ulanday, deposited the checks on various dates, and upon dishonor, notified the spouses and demanded payment, but the obligation remained unsettled.
On June 8, 2016, Tire Star’s messenger personally served a formal demand and notice of dishonor at the Carloses’ store; the spouses refused to receive it, so their employee Edrick San Juan accepted and signed for it. The Carloses claimed they had paid part of the obligation in cash and kind, but alleged that supporting vouchers were lost when their office was padlocked by city authorities.
The prosecution presented the payee’s representative and messenger as witnesses, while the defense relied solely on Arnel Carlos’s testimony and denied receipt of the notice of dishonor. The Carloses argued that the prosecution failed to prove beyond reasonable doubt that they actually received the notice of dishonor, a necessary element for conviction under BP 22.
They contended that the CA erred in holding against them their failure to present Edrick to refute the prosecution’s claim regarding receipt of the notice. They also challenged the imposition of legal interest from the date of extrajudicial demand, insisting it should only run from the finality of judgment.
The People and Tire Star maintained that the notice of dishonor was properly served, as evidenced by the messenger’s testimony and affidavit, and that the Carloses’ denial was unsubstantiated. They argued that the prosecution established all elements of BP 22, including the making and dishonor of the checks, and the presumption of knowledge of insufficient funds.
They asserted that the imposition of legal interest from the date of extrajudicial demand is consistent with prevailing jurisprudence.
MeTC: Found the Carloses guilty of six counts of BP 22, imposed fines equivalent to the check amounts, subsidiary imprisonment, and civil liability for the total value of the checks with interest.
RTC: Affirmed the MeTC’s conviction with modification as to the computation of interest, setting it at 6% per annum from the date of extrajudicial demand.
CA: Affirmed the RTC, holding that all elements of BP 22 were proven, including proper service of notice of dishonor, and sustained the penalties and civil liabilities imposed.
ISSUE: W/N the Carloses are guilty beyond reasonable doubt of violating BP 22
Ruling
The Court reiterated that the elements of BP 22 are: (1) making, drawing, and issuance of a check; (2) knowledge of insufficient funds at the time of issuance; and (3) subsequent dishonor of the check.
The first and third elements were undisputed: the Carloses issued the checks, and all were dishonored for “Account Closed.”
As to the second element, the law presumes knowledge of insufficient funds if the drawer fails to pay or make arrangements within five banking days after receiving notice of dishonor.
The Court found that the prosecution’s evidence, particularly the messenger’s testimony and affidavit of service, sufficiently established that notice of dishonor was served at the Carloses’ business, and their mere denial was insufficient to overcome this.
The Court clarified and standardized the rules for service of notice of dishonor in BP 22 cases, requiring an affidavit of service and allowing personal, registered mail, or electronic service, with supporting documentation.
The Court held that the factual findings of the trial and appellate courts, especially on credibility of witnesses and service of notice, are binding absent exceptional circumstances.
The imposition of legal interest from the date of extrajudicial demand was affirmed, consistent with jurisprudence.