G.R. No. 138669 ; June 6, 2002
STEVE TAN and MARCIANO TAN, petitioners, vs. FABIAN MENDEZ, JR., respondent.

FACTS

Petitioners Steve and Marciano Tan, operators of a bus company, maintained a credit line for fuel with respondent Fabian Mendez, Jr., owner of several gasoline stations. As payment for fuel purchased from May 2 to 15, 1991, petitioners issued FEBTC Check No. 704227 dated June 4, 1991, in the amount of P58,237.75. The check was dishonored upon presentment due to insufficient funds. Respondent sent a demand letter, but petitioners failed to make good the check, leading to the filing of an information for violation of Batas Pambansa Blg. 22 (B.P. 22).
At trial, petitioners admitted issuing the check and that it was unfunded. Their defense centered on compensation, alleging the fuel debt had been extinguished by offsetting it against respondent’s unremitted collections from ticket sales for petitioners’ bus company. Petitioners presented a memorandum they issued stating the check was “returned” to be offset against gasoline account. Respondent, however, denied agreeing to any such compensation.

ISSUE

Whether the defense of compensation extinguished petitioners’ obligation on the dishonored check, thereby absolving them of criminal liability under B.P. 22.

RULING

The Supreme Court affirmed petitioners’ conviction. The defense of compensation is unavailing in this criminal case for violation of B.P. 22. The offense is mala prohibita, and the law punishes the mere act of issuing a bouncing check. The elements of the crime are: (1) the making, drawing, and issuance of any check; (2) the knowledge of the maker, drawer, or issuer that at the time of issue he does not have sufficient funds in or credit with the drawee bank for the payment of the check in full upon its presentment; and (3) the subsequent dishonor of the check by the drawee bank for insufficiency of funds or credit. All these elements were proven beyond reasonable doubt.
The Court clarified that the civil obligation arising from the issuance of the worthless check is separate from the criminal liability. For compensation under the Civil Code to legally extinguish an obligation, it requires, among other things, that the parties be mutually debtor and creditor of each other in their own right and that there be a clear agreement or meeting of minds to compensate. The evidence showed no such agreement; petitioners’ unilateral act of issuing a memorandum declaring an offset is insufficient. Respondent’s consistent denial and immediate act of filing the case negated any consent to compensation. Thus, the civil obligation for the check’s value remained unpaid, and the criminal liability for issuing it attached upon its dishonor. The penalty of imprisonment was imposed, but in line with prevailing policy, the Court modified the penalty to a fine equal to double the amount of the check.