G.R. No. 141466 . January 19, 2001
ELIZA T. TAN, petitioner, vs. PEOPLE OF THE PHILIPPINES, respondent.

FACTS

Petitioner Eliza T. Tan, Vice-President of Hometown Development, Inc. (HDI), was charged with violating Batas Pambansa Blg. 22 (B.P. 22). She issued Philtrust Bank Check No. A000913 dated February 28, 1993, for P23,739.09 to Fidel M. Francisco, Jr., president of F.M. Francisco & Associates (FMF), as payment for construction services. Upon presentment, the check was dishonored. The prosecution alleged the dishonor was due to insufficiency of funds, constituting a violation.
The defense presented a different factual narrative. Petitioner claimed the check was one of two replacement checks issued for a previously lost check after the construction contract was terminated. She asserted that she subsequently paid the obligation in cash, as evidenced by a voucher acknowledged by Francisco. Consequently, she requested the bank to stop payment on the replacement checks. A bank representative testified that at the time of presentment, petitioner had a substantial credit line and sufficient funds to cover the check, and it was dishonored specifically due to the “Payment Stopped” order, not due to lack of funds.

ISSUE

Whether petitioner is guilty of violating B.P. 22, specifically whether she knew at the time of issuance that she had insufficient funds to cover the check.

RULING

The Supreme Court reversed the Court of Appeals and acquitted petitioner. The legal logic hinges on the failure of the prosecution to prove all essential elements of a B.P. 22 violation. For a conviction, the prosecution must establish that: (1) a check is made, drawn, and issued; (2) it is issued to apply on account or for value; (3) the issuer knows at the time of issue that she does not have sufficient funds or credit with the drawee bank for its payment in full upon presentment; and (4) the check is subsequently dishonored for insufficiency of funds or credit.
Crucially, the third and fourth elements were not established. The bank representative’s testimony confirmed that petitioner had a significant available credit line and that the account was funded. The check was stamped “Payment Stopped Funded” and “DAUD” (Drawn Against Uncollected Deposits). The dishonor was directly attributable to petitioner’s valid stop-payment order, issued because she had already settled the debt in cash, not due to insufficiency of funds. A stop-payment order based on a valid reason, such as prior payment, negates the presumption of knowledge of insufficiency of funds. Since the prosecution failed to prove beyond reasonable doubt that petitioner issued the check knowing she lacked funds, her acquittal was warranted.