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November 18, 2002 PEOPLE OF THE PHILIPPINES v.RICA G. CUYUGAN

FACTS:Private complainants RODRIGO and Norma ABAGAT are engaged in the business

of supplying dry goods, such as materials for building construction as well as communicationparts, to the Philippine Air Force. Accused appellant RICA G. CUYUGAN is a businesswomanwho furnished the Armed Forces of the Philippines (AFP) with office supplies, constructionmaterials, and signal and communication spare parts. Her husband is the cousin of privatecomplainant Norma Abagat. Sometime on May 10, 1994, private complainants gave accusedthe amount totaling to P855,000 that accused needed to buy supplies for AFP provided that

she would issue checks to complainants to cover the value of the money given her.When the checks were presented for payment, they were all dishonored either on account ofDAIF (drawn against insufficient funds) or for reason of ACCOUNT CLOSED. three counts ofestafa as defined and penalized under Article 315, paragraph 2 (d) of the Revised Penal Codewere filed against accused, Rica G. Cuyugan before the Regional Trial Court of Pasay .Moreover, when demands were made on the accused, she failed and refused to redeem ormake good the said checks face value to the damage and prejudice of the privateComplainants.

The trial court found appellant guilty beyond reasonable doubt of estafa committedby means of false pretenses or fraudulent acts executed prior to or simultaneously with thecommission of the fraud, that is by postdating a check or issuing a check in payment of anobligation when the offender had no funds in the bank, or his funds deposited therein were notsufficient to cover the amount of the check.

ISSUE:Whether or not the ACCUSED is GUILTY BEYOND REASONABLE DOUBT OF THREE (3)COUNTS OF ESTAFA pursuant to Article 315, 2 (d) of the Revised Penal Code as amendedby P.D. No. 818.

HELD:No, the accused is ACQUITTED by the Supreme Court for lack of sufficient evidence to provefraud beyond reasonable doubt. However, she is ordered to pay private complainants thebalance of her obligation in the amount of P430,000 plus interest of twelve percent (12%) perannum until fully paid.To constitute estafa under this provision the act of postdating or issuing a check in payment ofan obligation must be the efficient cause of defraudation, and as such it should be either priorto, or simultaneous with the act of fraud. The offender must be able to obtain money orproperty from the offended party because of the issuance of a check whether postdated or not.That is, the latter would not have parted with his money or other property were it not for the

issuance of the check.

In this case, the trial court failed to consider the testimonies of both the private complainantswith respect to the agreement that the checks issued by appellant shall be mere guaranteesfor the eventual payment of the money given to appellant.

The Supreme Court held that the transaction between appellant and the Abagat spouses, wasone for a loan of money to be used by appellant in her business and she issued checks toguarantee the payment of the loan. As such, she has the obligation to make good the paymentof the money borrowed by her. But such obligation is civil in character and in the absence offraud, no criminal liability under the Revised Penal Code arises from the mere issuance ofpostdated checks as a guarantee of repayment. It further found that appellants allegation,that the Abagat spouses entered into a joint venture agreement with her for the supply ofmaterials with the AFP, is self-serving. The Court also noted that the trial court convictedappellant on a general allegation that all the elements of estafa under Article 315, 2 (d) of the

Revised Penal Code had been proved by the prosecution without making any reference to orgiving any proof of the actual fraud that appellant allegedly committed to make her liable for

estafa. It is elementary that where an allegation in the information is an essential element ofthe crime, the same must be proved beyond reasonable doubt to sustain a conviction. In thiscase, the prosecution did not establish specifically and conclusively the fraud alleged as anelement of the offenses charged.

Furthermore, Appellant cannot be convicted of a crime for which she was notproperly charged, for that would violate appellants constitutional right to be informed of theaccusation against her. The informations filed with the regional trial court were for three countsof estafa. Earlier, the informations for BP 22 covering the same checks filed with theMetropolitan Trial Court of Pasay City, Branch 44, were provisionally dismissed on November13, 1996. These cases were not re-filed nor consolidated with the informations for estafa

before the RTC of Pasay. Accordingly, appellan t was never apprised of the fact that she maystill be held liable for BP 22 and so never had an opportunity to defend herself against anaccusation for an offense under the special law. BP 22 cannot be deemed necessarilyincluded in the crime of estafa under RPC, Article 315, 2 (d). The offense of fraud definedunder the Revised Penal Code is malum in se, whereas BP 22, also known as BouncingChecks Law, is a special law which punishes the issuance of bouncing checks, a malumprohibitum. They are different offenses, having different elements.32 In this case, sinceappellant is accused of violating a particular provision of the Revised Penal Code on estafa,she may not be convicted for violation of BP 22 without trenching on fundamental fairness.

January 18, 2001 PEOPLE OF THE PHILIPPINES v. GULION

FACTS:Danilo Gulion, accused-appellant, and Marilyn Miones, accused-at-large, had separate

checking accounts with the Far East Bank and Trust Company ("FEBTC") in Tagum, Davao:The checks subject of this case, while bearing the signature of accused-appellant, came fromthe check booklet of accused-at-large. Three checks were negotiated to private complainantRoselier Molina sometime on February 1990 under an arrangement termed "rediscounting",i.e., in exchange for cash, accused-appellant issued to Molina the checks, and the latterdeducted ten percent (10%) from the proceeds thereof. Thus, for two Checks, both in theamount of P15,000.00, Molina paid for each check P13,500.00 cash, and for other Check inthe amount of P5,000.00, he paid P4,500.00 cash. Such appears to be a long-standingpractice between Molina and accused-appellant, and Molina was in fact familiar with accused-appellant's signature as the latter often transacted with him using checks, instead of cash. Onall their previous transactions, Molina was able to recover the amounts he loaned out toaccused-appellant. The checks in the instant case were delivered by accused-at-large toMolina at the latter's residence in Apokon Road, Tagum, Davao. The checks, which as earlierstated were signed by accused-appellant, were paid to "CASH" and indorsed by accused-at-large on their respective dorsal portions. Such checks in exchange of cash in favor of Roselier

Molina upon presentation for payment of the bank within 90 days from date of issue, were alldishonored for reason "Account Closed" and that inspite of notice of dishonor and repeateddemands made, the said accused failed to make the necessary deposit to cover the amount ofthe check or to pay the same, to the damage and prejudice of Roselier Molina.

Three criminal cases were filed for the three checks which were jointly heard by the RegionalTrial Court (Branch 1) of Tagum, Davao only against accused-appellant Gulion. AccusedMarilyn Miones remained at large. On February 10, 1992, the trial court rendered a decisionconvicting accused-appellant DANILO GULION guilty beyond reasonable doubt of estafapursuant to Article 315, par. 2(d) of the Revised Penal Code, as amended by P.D. 818 whichwere affirmed by the Sixth Division of the Court of Appeals.

The trial court found the existence of an implied conspiracy between accused-appellant andaccused-at-large, as manifested in accused-appellant's unique modus operandus of drawingchecks from his co-conspirator's checking account to confuse the payee and evade liability.

The Court of Appeals upheld the trial court's finding of conspiracy, and held that based uponthe conduct of the two accused in the instant case, their closeness of personal association,

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concerted action and community of design, it is obvious that they conspired to defraud privatecomplainant through issuing worthless checks.

ISSUES:(1) Whether or not the accused-appellant conspired with accused-at-large by signing thechecks and can be held guilty for estafa under Article 315, paragraph 2(d) of the RevisedPenal Code .

HELD:The elements of estafa under Article 315, paragraph 2(d) of the Revised Penal Code, as

amended, are the following: (1) postdating or issuing checks in payment of an obligationcontracted at the time the checks were issued; (2) lack or insufficiency of funds to cover saidchecks; (3) knowledge on the part of the drawer of checks of such lack or insufficiency offunds; and (4) damage capable of pecuniary estimation to the payee thereof. 16 Underlying allthese must be the presence of fraud or deceit.The peculiarity of the instant case rests on the fact that the person who issued the checks isnot the lawful owner of the checking account from which the checks were drawn. Thus, at thetime these checks were issued by Gulion it is a foregone conclusion that Molina would neverrecover from the checks because the drawee bank would not recognize the signature ofGulion. In other words, the dishonor of the checks will not only be on account of lack orinsufficiency of funds in Miones's account but also because the checks are invalid for havingbeen issued by an unauthorized person. Thus, while to an extent we agree with accused-appellant that there was no valid issuance of the said checks we hold that accused-appellantcould still be held liable for estafa under Article 315, paragraph 2(d) of the Revised PenalCode even if he is not the owner of the checking account in question if it is shown that he

conspired with accused-at-large by knowingly signing the latter's checks to ensure Molina'sinability to encash the said checks. Under a theory of conspiracy, it is sufficient that theaccused is possessed of guilty knowledge that his co-accused had no funds in the bank whenthe checks were negotiated.

The existence of a conspiracy may be implied from the conduct of the accused before, duringand after the commission of the crime, showing that the accused had acted under a commonpurpose or design.18 Like the crime itself, the conspiracy must be proven beyond reasonabledoubt.For circumstantial evidence to convict, the Rules of Court require that: (1) there is more thanone circumstance; (2) the facts from which the inferences are derived are proven; and (3) thecombination of all the circumstances is such as to produce a conviction beyond reasonabledoubt.The Supreme Court held that while circumstances establish the friendship between thetwo accused and the trust that accused-appellant reposed upon accused-at-large, they areinsufficient to merit the conclusion that accused-appellant conspired with accused-at-large by

affixing his signatures on the latter's checks knowingly and with an intent to defraud Molina. Acloser look at the circumstances under which the checks were negotiated reveal that it wasMiones alone who delivered the checks to Molina and received payment therefor. There is noevidence that Miones was authorized by accused-appellant to exchange, on his behalf, thechecks for cash. There is also no evidence that accused-appellant received from Miones anyportion of the proceeds of the said checks. It is principal in a case of estafa through postdatedchecks that the accused must have been shown to have obtained money or property from theoffended party because of the issuance of the check. There is likewise no showing of pastinstances where Molina "rediscounted" Gulion's checks through Miones; the lower courtssimply and unquestioningly accepted as fact that Miones was an authorized agent of Gulion intransacting with Molina.In other words, the prosecution failed to show by the conduct of accused-appellant before,during and after the commission of the crime that he was a participant to the defraudation ofMolina. It certainly cannot be conclusively inferred from proof of his friendship with accused-at-large, or from his adamant refusal to pay Molina, or to even recognize the existence of the

debt.

In contrast to the weakness of the prosecution's evidence, accused-appellant presented afairly cohesive and logical explanation for how his signatures figured in the questioned checks.He stated that as the proprietor of an insurance agency, he habitually signed blank checks foragents' commissions and office bills, which his secretary then filled out with the pertinentnames of payees, dates and amounts. He signed Miones's checks while in a hurry as he hadan appointment at another town, thinking them to be the usual blank checks laid out by hissecretary on his table for his signature. His insistence that the checks were so much like hisown is believable, because he also had a checking account with FEBTC.Following his version of the story, it is not altogether improbable that a trusted friend of his likeMiones (who was frequently in and out of his office and could have been very familiar with his

work habits and schedules) took advantage of his carelessness and stealthily placed her threeblank checks on his office table with the design to obtain money from Molina using hissignature. Then Miones filled in the other details in the checks, by postdating them, makingthem payable to "CASH", and even affixing her signature thereto as indorser.Not surprisingly, the checks were dishonored upon presentment, for the reason "AccountClosed and Signature Differs on File." Accused-appellant came to know of his allegedinvolvement in these unpaid obligations only when Molina's lawyer sent him a demand letter,to which his reaction was to disown owing any debts to, or having issued any checks in favorof, Molina.Good faith is a defense to a charge of estafa by postdating a check.22 This may be manifestedby the accused's offering to make arrangements with his creditor as to the manner ofpayment23 or, as in the present case, averring that his placing his signature on the questionedchecks was purely a result of his gullibility and inadvertence, with the unfortunate result that hehimself became a victim of the trickery and manipulations of accused-at-large.

Based on all the foregoing, we hold that accused-appellant cannot be held guilty for estafaunder Article 315, paragraph 2(d) of the Revised Penal Code because the evidence of theprosecution absolutely failed to prove his guilt.

KAZUHIRO HASEGAWA v. KITAMURA, November 23, 2007

FACTS:

On March 30, 1999, petitioner Nippon Engineering Consultants Co., Ltd. (Nippon), a Japaneseconsultancy firm providing technical and management support in the infrastructure projects offoreign governments entered into an Independent Contractor Agreement (ICA) withrespondent Minoru Kitamura, a Japanese national permanently residing in the Philippineswhich provides that respondent was to extend professional services to Nippon for a yearstarting on April 1, 1999.Then, Nippon assigned respondent to work as the project manager of

the Southern Tagalog Access Road (STAR) Project in the Philippines, following the company'sconsultancy contract with the Philippine Government.

On February 28, 2000, petitioner Kazuhiro Hasegawa, Nippon's general managerfor its International Division, informed respondent that the company had no more intention ofautomatically renewing his ICA. His services would be engaged by the company only up to thesubstantial completion of the STAR Project on March 31, 2000, just in time for the ICA'sexpiry.

Threatened with impending unemployment, respondent, through his lawyer,requested a negotiation conference and demanded that he be assigned to the BBRI project.Because of Nippons refusal to negotiate for the renewal of the ICA , respondent consequentlyinitiated on June 1, 2000, a civil case for specific performance and damages with the RegionalTrial Court of Lipa City. For their part, petitioners, contending that the ICA had been perfectedin Japan and executed by and between Japanese nationals, moved to dismiss the complaint

for lack of jurisdiction. They asserted that the claim for improper pre-termination of

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respondent's ICA could only be heard and ventilated in the proper courts of Japan followingthe principles oflex loci celebrationis and lex contractus.

In the meantime, on June 20, 2000, the DPWH approved Nippon's request for thereplacement of Kitamura by a certain Y. Kotake as project manager of the BBRI Project. 1

On June 29, 2000, the RTC, denied the motion to dismiss and subsequently deniedpetitioners' motion for reconsideration,prompting them to file with the appellate court, on

August 14, 2000, their first Petition forCertiorariunder Rule 65. The CA ruled, among others,that the principle oflex loci celebrationis was not applicable to the case, because nowhere inthe pleadings was the validity of the written agreement put in issue. The CA thus declared that

the trial court was correct in applying instead the principle of lex loci solutionis. Petitioners'motion for reconsideration was subsequently denied by the CA.

ISSUES:whether the subject matter jurisdiction of Philippine courts in civil cases for specificperformance and damages involving contracts executed outside the country by foreignnationals may be assailed on the principles of lex loci celebrationis, lex contractus, the stateof the most significant relationship rule, orforum non conveniens.

HELD:No, the Supreme Court held that RTC is vested by law with the power to entertain and hearthe civil case filed by respondent and the grounds raised by petitioners to assail that

jurisdiction are inappropriate.

The ICA subject of the litigation was entered into and perfected in Tokyo, Japan, by Japanese

nationals, and written wholly in the Japanese language. Thus, petitioners posit that localcourts have no substantial relationship to the parties following the [state of the] mostsignificant relationship rule in Private International Law.

To elucidate, in the judicial resolution of conflicts problems, three consecutive phases areinvolved: jurisdiction, choice of law, and recognition and enforcement of judgments.Corresponding to these phases are the following questions: (1) Where can or should litigationbe initiated? (2) Which law will the court apply? and (3) Where can the resulting judgment beenforced?2[53]

Analytically, jurisdiction and choice of law are two distinct concepts.3[54]Jurisdictionconsiders whether it is fair to cause a defendant to travel to this state; choice of law asks thefurther question whether the application of a substantive law which will determine the merits ofthe case is fair to both parties. The power to exercise jurisdiction does not automatically give astate constitutional authority to apply forum law. While jurisdiction and the choice of the lex fori

will often coincide, the minimum contacts for one do not always provide the necessarysignificant contacts for the other.4[55]The question of whether the law of a state can beapplied to a transaction is different from the question of whether the courts of that state have

jurisdiction to enter a judgment.5[56]

In this case, only the first phase is at issuejurisdiction. Jurisdiction, however, hasvarious aspects. For a court to validly exercise its power to adjudicate a controversy, it musthave jurisdiction over the plaintiff or the petitioner, over the defendant or the respondent, over

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the subject matter, over the issues of the case and, in cases involving property, over the res orthe thing which is the subject of the litigation.6[57] In assailing the trial court's jurisdiction herein,

petitioners are actually referring to subject matter jurisdiction.

Jurisdiction over the subject matter in a judicial proceeding is conferred by thesovereign authority which establishes and organizes the court. It is given only by law and inthe manner prescribed by law.7[58] It is further determined by the allegations of the complaintirrespective of whether the plaintiff is entitled to all or some of the claims asserted therein.8[59]

To succeed in its motion for the dismissal of an action for lack of jurisdiction over the subjectmatter of the claim,9[60] the movant must show that the court or tribunal cannot act on the

matter submitted to it because no law grants it the power to adjudicate the claims. Inthe instant case, petitioners, in their motion to dismiss, do not claim that the trial court is not

properly vested by law with jurisdiction to hear the subject controversy for, indeed, the civilcase for specific performance and damages is one not capable of pecuniary estimation and is

properly cognizable by the RTC of Lipa City.10[62] What they rather raise as grounds toquestion subject matter jurisdiction are the principles of lex loci celebrationis and lexcontractus, and the state of the most significant relationship rule.

Lex loci celebrationis relates to the law of the place of the ceremony11[63] or the lawof the place where a contract is made.12[64] The doctrine oflex contractus orlex loci contractusmeans the law of the place where a contract is executed or to be performed.13[65] It controlsthe nature, construction, and validity of the contract14[66] and it may pertain to the law voluntarilyagreed upon by the parties or the law intended by them either expressly or implicitly. 15[67] Underthe state of the most significant relationship rule, to ascertain what state law to apply to adispute, the court should determine which state has the most substantial connection to the

occurrence and the parties. In a case involving a contract, the court should consider where thecontract was made, was negotiated, was to be performed, and the domicile, place of business,or place of incorporation of the parties.16[68] This rule takes into account several contacts andevaluates them according to their relative importance with respect to the particular issue to beresolved.17[69]

Since these three principles in conflict of laws make reference to the law applicableto a dispute, they are rules proper for the second phase, the choice of law.18[70] They determinewhich state's law is to be applied in resolving the substantive issues of a conflicts problem.19[71]

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Necessarily, as the only issue in this case is that of jurisdiction, choice-of-law rules are notonly inapplicable but also not yet called for.

Further, petitioners' premature invocation of choice-of-law rules is exposed by thefact that they have not yet pointed out any conflict between the laws of Japan and ours. Beforedetermining which law should apply, first there should exist a conflict of laws situation requiringthe application of the conflict of laws rules.20[72] Also, when the law of a foreign country isinvoked to provide the proper rules for the solution of a case, the existence of such law mustbe pleaded and proved.21[73]

It should be noted that when a conflicts case, one involving a foreign element, isbrought before a court or administrative agency, there are three alternatives open to the latterin disposing of it: (1) dismiss the case, either because of lack of jurisdiction or refusal toassume jurisdiction over the case; (2) assume jurisdiction over the case and apply the internallaw of the forum; or (3) assume jurisdiction over the case and take into account or apply thelaw of some other State or States. 22[74] The courts power to hear cases and controversies isderived from the Constitution and the laws. While it may choose to recognize laws of foreignnations, the court is not limited by foreign sovereign law short of treaties or other formalagreements, even in matters regarding rights provided by foreign sovereigns. Neither can theother ground raised, forum non conveniens, be used to deprive the trial court of its jurisdictionherein. First, it is not a proper basis for a motion to dismiss because Section 1, Rule 16 of theRules of Court does not include it as a ground. Second, whether a suit should be entertainedor dismissed on the basis of the said doctrine depends largely upon the facts of the particularcase and is addressed to the sound discretion of the trial court. In this case, the RTC decidedto assume jurisdiction. Third, the propriety of dismissing a case based on this principle

requires a factual determination; hence, this conflicts principle is more properly considered amatter of defense.

ALBINO JOSEF, G.R. No. 146424- v e r s u sPEOPLE OF THE PHILIPPINESNovember 18, 2005

FACTSFrom the period of June to August, 1991, Albino Josef, petitioner, a Marikina-basedmanufacturer and seller of shoes, purchased materials from respondent Agustin Alarilla, aseller of leather products from Meycauayan, Bulacan, for which the former issued a total of 26

postdated checks against his account with the Associated Bank and Far East Bank & TrustCompany (Marikina Branches). When private respondent presented these checks forencashment, they were dishonored because the accounts against which they were drawnwere closed. Private respondent informed petitioner of the dishonor and demanded paymentof their value. After some negotiations, petitioner drew and delivered a new set of postdatedchecks in replacement of the dishonored ones. Private respondent, in turn, returned topetitioner the originals of the dishonored postdated checks but retained photocopies thereof.When private respondent deposited the replacement checks in his account with the WestmontBank, these were also dishonored by the drawee bank. As a result, the private respondentfiled criminal complaints against petitioner for violation of BP 22 with the Office of theProvincial Prosecutor of Bulacan. After preliminary investigation, the Provincial Prosecutor

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filed 26 Informations against petitioner with the RTC of Bulacan for violation of BP 22 alsoknown as the Anti-Bouncing Checks Law.The trial court convicted petitioner on all counts and imposed the penalty of six months foreach conviction which the Court of Appeals later affirmed.(1) Whether or not the trial court was incorrect to accept as evidence photocopies of theoriginal checks and

(2) Whether the accused acted in good faith(3) Whether or not the penalty of imprisonment was incorrectly imposed on petitioner in the

light of Administrative Circular No. 12-2000

HELD:(1) The Supreme Court held that the trial court did not commit any reversible error in admittingin evidence the photostatic copies of the subject checks in lieu of the originals thereof in thepossession of the. It bears stressing that the raison detre of the proscription against theadmission of secondary evidence in lieu or in substitution of the original thereof is to preventthe commission of fraud on the part of the offeror who is in possession of the bestevidence.The petitioner admitted in his testimonies, albeit impliedly, that the photostatic copiesof the checks admitted in evidence by the Court a quo were the faithful reproduction of theoriginal copies in his possession, thus, petitioner cured whatever flaw might have existed inthe prosecutions evidence. The fact that these originals were all stamped account closedmerely confirmed the allegations of the respondent that the checks were dishonored by reasonof the account being closed. Because they were entirely consistent with its main theory, theprosecution correctly adopted these originals as its own evidence. In addition, by petitioners

own admission, five of the original checks were lost, thus rendering the photocopies thereofadmissible as exceptions to the Best Evidence Rule.(2) Regarding petitioners allegation of good faith, suffice it to say that such a claim isimmaterial, the offense in question being malum prohibitum.The gravamen of the offense isthe issuance of a bad check and therefore, whether or not malice and intent attended suchissuance is unimportant.(3)In invoking of A.C. No. 12-2000, petitioner adopts the interpretation of Justice Villarama tothe effect that the circular mandates judges to impose fines rather than imprisonment onviolators of BP 22.The Supreme Court noted that the clear tenor and intention of Administrative Order No. 12-2000 is not to remove imprisonment as an alternative penalty, but to lay down a rule ofpreference in the application of the penalties provided for in B.P. Blg. 22.The pursuit of this purpose clearly does not foreclose the possibility of imprisonment for

violators of B.P. Blg. 22. Neither does it defeat the legislative intent behind the law.

Thus, Administrative Circular No. 12-2000 establishes a rule of preference in the application ofthe penal provisions of B.P. Blg. 22 such that where the circumstances of both the offense andthe offender clearly indicate good faith or a clear mistake of fact without taint of negligence,the imposition of a fine alone should be considered as the more appropriate penalty.Needless to say, the determination of whether the circumstances warrant theimposition of a fine alone rests solely upon the Judge. Should the Judge decide thatimprisonment is the more appropriate penalty, Administrative Circular No. 12-2000ought not to be deemed a hindrance (emphasis ours). Clearly, the imposition of either afine or imprisonment remains entirely within the sound discretion of the judge trying the case,based on his assessment of the offender and the facts.