G.R. No. 125214 October 28, 1999
PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. ELPIDIO HERNANDO and ELENA ABAN HERNANDO, accused-appellants.

FACTS

Accused spouses Elpidio Hernando and Elena Aban Hernando were convicted by the Regional Trial Court of estafa under Article 315, paragraph 2(d) of the Revised Penal Code. The information alleged that between May 11, 1995, and June 21, 1995, in Manila, the accused, conspiring and knowing they did not have sufficient funds, issued six Union Bank checks totaling P700,000.00 to complainant Johnny Sy in exchange for cash. Upon presentment, the checks were dishonored due to “Account Closed,” and the accused failed to make good the checks despite notice.
The antecedent facts are undisputed. The accused spouses were engaged in the importation and sale of computers, while complainant Johnny Sy owned the Palomino Club, where the spouses were customers. Elena Hernando opened a current account for Herban Trading with Union Bank on July 14, 1994. Between May and June 1995, in five separate transactions, complainant gave cash to accused Elpidio Hernando in exchange for checks signed by his wife, Elena. In each transaction except the first, Elena was not present. The checks were issued on the dates of the cash exchanges. In July 1995, Elena requested complainant not to deposit the checks, promising cash payment, but the checks were dishonored when deposited later that month because the account had been closed on July 18, 1995, due to overdraft. After demands for payment, which included a threat from Elpidio, and a ten-month wait, complainant filed the estafa complaint.
The defense, presented through accused Elpidio Hernando, admitted receiving the money but claimed the checks were merely evidence of indebtedness for loans obtained at an interest from complainant, who acted as their financier. They denied assuring the checks were funded.
The trial court found that the accused’s assurance that the checks were funded and the delivery of the checks were the efficient cause of defraudation. It found conspiracy, as Elena issued the checks while Elpidio transacted with the complainant. The court convicted both accused and sentenced each to “imprisonment of thirty (30) years of reclusion perpetua” and to indemnify complainant P700,000.00. Accused spouses appealed.

ISSUE

The primary issue is whether the accused spouses are guilty of estafa under Article 315, paragraph 2(d) of the Revised Penal Code.

RULING

The Supreme Court affirmed the conviction but modified the penalty. The elements of estafa under Article 315, paragraph 2(d) are: (1) postdating or issuance of a check in payment of an obligation contracted at the time the check was issued; (2) lack or insufficiency of funds to cover the check; and (3) damage to the payee. All elements were present. The checks were issued simultaneously with the receipt of cash, constituting an obligation contracted at the time of issuance. The account was closed and had a zero balance when closed, indicating lack of funds. Complainant suffered damage as the checks were dishonored.
The defense of the checks being issued merely as evidence of indebtedness (a loan transaction) is unavailing. The law punishes the act of issuing a bouncing check whether as a form of payment or as a security for a loan. The accused’s knowledge of the insufficiency of funds is presumed from the dishonor of the check for insufficiency of funds. The Court found conspiracy, as the acts of Elena (issuing the checks) and Elpidio (negotiating them and receiving cash) demonstrated a common purpose to defraud.
Regarding the penalty, the trial court erred in imposing “thirty (30) years of reclusion perpetua.” For estafa involving P700,000.00, under the amendatory law (P.D. No. 818), the penalty is reclusion temporal in its maximum period to reclusion perpetua. Applying the Indeterminate Sentence Law, the maximum term should be taken from the maximum period of reclusion temporal (17 years, 4 months, 1 day to 20 years), and the minimum term from the penalty next lower in degree (prision mayor in its maximum period to reclusion temporal in its medium period, or 10 years and 1 day to 17 years and 4 months). The Court modified the penalty to an indeterminate sentence of 10 years and 1 day of prision mayor as minimum, to 20 years of reclusion temporal as maximum. The order to indemnify complainant P700,000.00 was affirmed.