Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&amp;view=article&amp;id=50730:gr-175381-2008&amp;catid=1502&amp;Itemid=566
Timestamp: 2019-04-19 08:27:42+00:00

Document:
JAMES SVENDSEN, Petitioner, v. PEOPLE OF THE PHILIPPINES, Respondent.
Assailed via Petition for Review on Certiorari is the Court of Appeals Decision1 of November 16, 2006 denying petitioner's appeal from the December 22, 2005 Decision2 of the Regional Trial Court (RTC) of Manila, Branch 14 which affirmed the December 17, 2003 Judgment3 of the Metropolitan Trial Court (MeTC) of Manila, Branch 5, finding James Svendsen (petitioner) guilty of violation of Batas Pambansa Blg. (B.P. Blg.) 22 or the Bouncing Checks Law.
Cristina thus filed a collection suit against petitioner, which was eventually settled when petitioner paid her P200,0005 and issued in her favor an International Exchange Bank check postdated February 2, 1999 (the check) in the amount of P160,000 representing interest.6 The check was co-signed by one Wilhelm Bolton.
That sometime in December 1998 the said accused did then and there willfully, unlawfully, and feloniously and jointly make or draw and issue to CRISTINA C. REYES to apply on account or for value INTERNATIONAL EXCHANGE BANK check no. 0000009118 dated February 2, 1999 payable to CRISTINA REYES in the amount of P160,000.00 said accused well knowing that at the time of issue she/he/they did not have sufficient funds and/or credit with the drawee bank for payment of such check in full upon its presentment, which check after having been deposited in the City of Manila, Philippines, and upon being presented for payment within ninety (90) days from the date thereof was subsequently dishonored by the drawee bank for INSUFFICIENCY OF FUNDS and despite receipt of notice of such dishonor, said accused failed to pay said CRISTINA C. REYES the amount of the check or to make arrangement for full payment of the same within five (5) banking days after receiving said notice.
WHEREFORE, this Court finds accused James Robert Svendson [sic] GUILTY beyond reasonable doubt of a violation of Batas Pambansa Blg. 22 (Bouncing Checks Law) and imposes upon him to pay a fine of ONE HUNDRED SIXTY THOUSAND PESOS (P160,000.00), with subsidiary imprisonment in case of insolvency.
Accused is also made liable to pay private complainant Cristina C. Reyes civil indemnity in the total amount of ONE HUNDRED SIXTY THOUSAND PESOS (P160,000.00) representing his civil obligation covered by subject check.
As priorly stated, the RTC affirmed the MeTC judgment and the Court of Appeals denied petitioner's appeal.
Petitioner argues that the appellate court erred in finding that the first element of violation of B.P. Blg. 22 - the making, drawing, and issuance of any check "to apply on account or for value" - was present, as the obligation to pay interest is void, the same not being in writing and the 10% monthly interest is unconscionable; in holding him civilly liable in the amount of P160,000 to private complainant, notwithstanding the invalidity of the interest stipulation; and in violating his right to due process when it convicted him, notwithstanding the absence of proof of receipt by him of a written notice of dishonor.
SECTION 1. Checks without sufficient funds. - Any person who makes or draws and issues any check to apply on account or for value, knowing at the time of issue that he does not have sufficient funds in or credit with the drawee bank for the payment of such check in full upon its presentment, which check is subsequently dishonored by the drawee bank for insufficiency of funds or credit or would have been dishonored for the same reason had not the drawer, without any valid reason, ordered the bank to stop payment, shall be punished by imprisonment of not less than thirty days but not more than one (1) year or by fine of not less than but not more than double the amount of the check which fine shall in no case exceed Two Hundred Thousand pesos, or both such fine and imprisonment at the discretion of the court.
The same penalty shall be imposed upon any person who, having sufficient funds in or credit with the drawee bank when he makes or draws and issues a check, shall fail to keep sufficient funds or to maintain a credit to cover the full amount of the check if presented within a period of ninety (90) days from the date appearing thereon, for which reason it is dishonored by the drawee bank. 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.
Petitioner admits having issued the postdated check to Cristina. The check, however, was dishonored when deposited for payment in Banco de Oro due to DAIF. Hence, the first and the third elements obtain in the case.
[t]he making, drawing and issuance of a check payment of which is refused by the drawee because of insufficient funds in or credit with such bank, when presented within ninety (90) days from the date of the check, shall be prima facieevidence of knowledge of such insufficiency of funds or credit unless such maker or drawer pays the holder thereof the amount due thereon, or makes arrangements for payment in full by the drawee of such check within five (5) banking days after receiving notice that such check has not been paid by the drawee.
x x x [I]f x x x notice of non-payment by the drawee bank is not sent to the maker or drawer of the bum check, or if there is no proof as to when such notice was received by the drawer, then the presumption of knowledge as provided in Section 2 of B.P. 22 cannot arise, since there would simply be no way of reckoning the crucial five-day period.
x x x In recent cases, we had the occasion to emphasize that not only must there be a written notice of dishonor or demand letters actually received by the drawer of a dishonored check, but there must also be proof of receipt thereof that is properly authenticated, and not mere registered receipt and/or return receipt.
For failure then to prove all the elements of violation of B.P. Blg. 22, petitioner's acquittal is in order.
The decision of the MeTC, which was affirmed on appeal by the RTC and the appellate court, ordering petitioner "to pay private complainant Cristina C. Reyes civil indemnity in the total amount of ONE HUNDRED SIXTY THOUSAND PESOS (P160,000) representing his civil obligation covered by subject check," deserves circumspect examination, however, given that the obligation of petitioner to pay 10% interest per month on the loan is unconscionable and against public policy.
The interest rate of 10% per month agreed upon by the parties in this case being clearly excessive, iniquitous and unconscionable cannot thus be sustained. In Macalalag v. People,23 DiÃ±o v. Jardines,24 and in Cuaton v. Salud,25 this Court, finding the 10% per month interest rate to be unconscionable, reduced it to 12% per annum. And in other cases26 where the interest rates stipulated were even less than that involved herein, the Court equitably reduced them.
Respecting petitioner's claim that since the promissory note incorporating the stipulated 10% interest per month was not presented, there is no written proof thereof, hence, his obligation to pay the same must be void, the same fails. As reflected above, Cristina admitted such stipulation.
In any event, the presentation of the promissory note may be dispensed with in a prosecution for violation of B.P. Blg. 22 as the purpose for the issuance of such check is irrelevant in the determination of the accused's criminal liability. It is for the purpose of determining his civil liability that the document bears significance. Notably, however, Section 24 of the Negotiable Instruments Law provides that "Every negotiable instrument is deemed prima facie to have been issued for a valuable consideration, and every person whose signature appears thereon to have become a party thereto for value." It was incumbent then on petitioner to prove that the check was not for a valuable consideration. This he failed to discharge.
WHEREFORE, the Court of Appeals Decision of November 16, 2006 is REVERSED and SET ASIDE.
Petitioner, James Svendsen, is acquitted of the crime charged for failure of the prosecution to prove his guilt beyond reasonable doubt.
He is, however, ordered to pay private complainant, Cristina C. Reyes, the amount of SIXTEEN THOUSAND PESOS (P16,000) representing civil indemnity, plus 12% interest per annum computed from April 29, 1999 up to the finality of this judgment. After the judgment becomes final and executory until the obligation is satisfied, the total amount due shall earn interest at 12% per annum.
1 Rollo, pp. 108-116. Penned by Associate Justice Estela Perlas-Bernabe and concurred in by Associate Justices Renato Dacudao and Rosmari Carandang.
2 Id. at 45-50. Penned by Judge Cesar M. Solis.
3 Id. at 21-30. Penned by Acting Presiding Judge Ma. Theresa Dolores Gomez-Estoesta.
6 TSN, October 11, 1999, p. 23.
9 MeTC records, p. 2.
11 Arceo, Jr. v. People, G.R. No. 142641, July 17, 2006, 495 SCRA 204, 211; Josef v. People, G.R. No. 146424, November 18, 2005, 475 SCRA 417, 420; Domagsang v. Court of Appeals, 400 Phil. 847, 853 (2000); Lim v. People, 394 Phil. 844, 851-852 (2000).
12 440 Phil. 540 (2002).
14 MeTC records, p. 49.
15 Supra note 12 at 540-555.
16 398 Phil. 481 (2000).
18 1 Reyes, The Revised Penal Code, 15th ed., 2001, p. 875; vide also Ramos v. Gonong, 164 Phil. 557, 563 (1976).
19 TSN, October 11, 1999, p. 20.
20 Solangon v. Salazar, 412 Phil. 816, 822 (2001); Ruiz v. Court of Appeals, G.R. No. 146942, April 22, 2002, 401 SCRA 410, 421.
(7) Those expressly prohibited or declared void by law.
22 Cuaton v. Salud, 465 Phil. 999, 1005 (2004).
23 G.R. No. 164358, December 20, 2006, 511 SCRA 400.
24 G.R. No. 145871, January 31, 2006, 481 SCRA 226.
25 G.R. No. 158382, January 27, 2004, 421 SCRA 278.
26 In Arrofo v. QuiÃ±o (G.R. No. 145794, January 26, 2005, 449 SCRA 284), this Court reduced the 7% interest per month to 18% per annum. In Medel v. Court of Appeals (359 Phil. 820 ), the interest stipulated at 5.5% per month was found unconscionable and was reduced to 12% per annum. In Ruiz v. Court of Appeals (G.R. No. 146942, April 22, 2003, 401 SCRA 410), the interest rate of 3% per month was reduced to 1% per month. In Solangon v. Salazar (412 Phil. 816, ), the stipulated interest rate of 6% per month was reduced to 12% per annum.
27 Cuaton v. Salud, 465 Phil. 999, 1006-1007 (2004) citing Eastern Shipping Lines, Inc. v. Court of Appeals, G.R. No. 97412, July 13, 1994, 234 SCRA 78, 95-97.

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