G.R. No. 110782 September 25, 1998
IRMA IDOS, petitioner, vs. COURT OF APPEALS and PEOPLE OF THE PHILIPPINES, respondents.

FACTS

Petitioner Irma Idos, a businesswoman engaged in leather tanning, and private complainant Eddie Alarilla, her erstwhile supplier, formed a partnership named “Tagumpay Manufacturing.” In January 1986, they agreed to terminate the partnership. Upon liquidation, the partnership assets were valued at P1,800,000.00, with Alarilla’s share being P900,000.00. To pay this share, Idos issued four postdated checks. The first, second, and fourth checks were encashed, but the third check (Metrobank Check No. 103115490 dated October 30, 1986, for P135,828.87) was dishonored on October 14, 1986, for insufficiency of funds. Alarilla demanded payment, but Idos denied liability, claiming the check was given only as an “assurance” of his share and was not to be deposited until partnership stocks were sold. An Information for violation of Batas Pambansa Blg. 22 (Bouncing Checks Law) was filed against Idos. The Regional Trial Court of Malolos, Bulacan, convicted Idos, sentencing her to six months imprisonment, a fine of P135,000.00, and to pay Alarilla the check amount with 12% interest. The Court of Appeals affirmed the conviction. During the pendency of the petition before the Supreme Court, the parties executed a compromise agreement regarding the civil aspect.

ISSUE

The decisive issue is whether the Court of Appeals erred in affirming the trial court’s judgment that petitioner Irma Idos violated Batas Pambansa Blg. 22, specifically concerning: (1) whether the check was issued to apply on account or for value, and (2) whether petitioner issued the check knowing she had insufficient funds and without communicating this fact.

RULING

The Supreme Court granted the petition and reversed the decision of the Court of Appeals. The Court held that the check in question was not issued “to apply on account or for value,” which is an essential element of the offense under B.P. 22. The evidence showed the check was intended to be funded only from the proceeds of the sale of partnership stocks and collection of receivables, and was issued as evidence of complainant’s share in the partnership or as a commitment to return his investment share and profit. The check was therefore issued merely as a guarantee or evidence of a pre-existing debt arising from the partnership dissolution, not as a direct exchange for value at the time of issuance. Consequently, the first element of the offense under B.P. 22 was not present. The Court also noted that the petitioner had informed the complainant that the check was not sufficiently funded, which further negated the presence of deceit. Since the check was not issued for value, the petitioner’s conviction could not be sustained. The Court set aside the conviction and acquitted petitioner Irma Idos.