Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 163662               February 25, 2015

PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee,

vs.
JULIE GRACE K. VILLANUEVA, Accused-Appellant.

DECISION

BERSAMIN, J.:

Under review is the decision promulgated on May 25, 2004,  whereby the Court of Appeals (CA)
1

affirmed with modification the judgment rendered on January 24, 2002 by the Regional Trial Court
(RTC), Branch 60, in Makati City convicting Julie Grace K. Villanueva of estafa as defined and
penalized under Article 315, paragraph 2 (d) of the Revised Penal Code.  The decretal portion of the
2

assailed decision reads:

WHEREFORE, the decision appealed from convicting accused-appellant Julie Grace K. Villanueva
of estafa under Article 315, paragraph 2(d) of the Revised Penal Code is AFFIRMED, with
MODIFICATION as to the penalty imposed as hereinabove indicated. The Resolution of January 15,
2004 granting her bail pending appeal is REVOKED and her profferred bail bond is REJECTED.
Pursuant to Section 13, second paragraph, Rule 124 of the 2000 Revised Rules of Criminal
Procedure, the case, inclusive of the entire record thereof, is CERTIFIED and ELEVATED to the
Supreme Court for review. Costs against the accused-appellant.

SO ORDERED. 3

Antecedents

Villanueva stands charged with estafa as defined and penalized under Article 315, paragraph 2 (d),
of the Revised Penal Code under the information that reads:

That on or about the 16th day of August 1994, in the City of Makati, Philippines and within the
jurisdiction of this Honorable Court, the above-named accused, did then and there willfully,
unlawfully and feloniously by means of deceit, false pretenses and fraudulent acts executed prior to
or simultaneously with the commission of the fraud, following PNB checks, [to] wit:

Check No. Date Amount

031526 9-02-94 ₱185,000.00
031527 9-17-94 185,000.00
031528 10-02-94 185,000.00
031529 10-17-94 185,000.00
 031532 9-16-94 85,000.00
031533 10-16-94 85,000.00
031534 11-16-94 85,000.00

as payment for various jewelries (sic) purchased to (sic) the said complainant, the accused well
knowing that at the time of issue thereof, the said checks have no sufficient funds in or credit with
the drawee bank to cover the amount of the said checks, neither will said checks be honored or paid
upon presentment, the bank dishonored and returned the said checks for the reason "account
closed" or "stopped payment" or should have been dishonored for insufficiency of funds had not the
said accused, without any valid reason, ordered her drawee bank to stop payment and despite
repeated demands accused failed and refused to deposit the amount necessary to cover the
aforesaid check or to pay the value thereof, to the damage and prejudice of the said complainant in
the aforesaid amounts.

CONTRARY TO LAW. 4

Version of the Prosecution

In August 1994, Loreto Madarang met Villanueva through a townmate. The latter was interested in
buying jewelry. Being then engaged in the business of selling jewelry, Madarang went to Villanueva's
residence at the Galeria de Magallanes, and was able to sell to Villanueva five sets of jewelry worth
₱1,010, 000. 00.  Villanueva made out nine checks drawn against Philippine National Bank (PNB),
5

eight of which were postdated. Villanueva signed a receipt reading as follows:6

August 16, 1994

Received from MRS. LORETO A. MADARANG the following jewelries (sic) with the corresponding
amount

1 set diamond - ₱70,000

1 set South Sea Black
w/ necklace & bracelet - 220,000
1 set heart shape diamond
w/ pendant (4.56 cts) - 450,000
1 set marquee xxx dia. 2 cts. - 220,000
1 bracelet diamond - 50,000

₱1,010,000

paid by the following checks issued by me

PNB #031501 - August 6, 1994 ₱5,000

PNB #031531 - August 19, 1994 10,000
PNB #031526 - Sept. 2, 1994 185,000
 PNB #031527 - Sept. 17, 1994 185,000
PNB #031528 - Oct. 2, 1994 185,000
PNB #031529 - Oct. 17, 1994 185,000
PNB #031532 - Sept. 16, 1994 85,000
PNB #031533 - Oct. 16, 1994 85,000
PNB #031534 - Nov. 16, 1994 85,000

₱1,010,000

with a total of One Million Ten Thousand pesos.

(sgd)
JULIE GRACE K. VILLANUEVA

Madarang received the checks because of Villanueva's assurance that they would all be honored
upon presentment.  However, the drawee bank paid only PNB Check No. 031501 and PNB Check
7

No. 131531, the remaining seven checks being dishonored either by reason of Account Closed or
Drawn Against Insufficient Funds.  Madarang tried to call and see Villanueva at her residence to
8

inform her of the dishonored checks, but Madarang was barred by security guards from reaching
Villanueva.  Madarang resorted to sending demand letters, but her effort to contact Villanueva
9

proved futile.  After Villanueva did not settle her obligations, Madarang brought the criminal
10

complaint for estafa,  and the corresponding information for estafa was ultimately filed in court on
11

September 4, 1995. On arraignment, Villanueva pleaded not guilty. 12

Version of the Defense

Villanueva denied the accusation. She claimed that she met Madarang three times. The first was at
the residence of Cheng Diaz Davis, where Madarang was then selling jewelry. The second time was
at her residence in the Galeria de Magallanes where Madarang arrived without prior notice at around
7:00 or 7:30 in the evening. Madarang was persistent that Villanueva buy jewelry on credit, and even
assured Villanueva that she could replace the same if she was dissatisfied with her purchase.
Madarang prevailed on Villanueva to buy six pieces of jewelry, for which she issued six checks as
payment, five of which were postdated. On August 16, 1994, Villanueva saw Madarang for the last
time to have the jewelry replaced. Villanueva retrieved the checks she had previously issued and
replaced them with another set of postdated checks that were the subject of the criminal case
against her. Villanueva maintained that the second set of checks were issued as guarantee under
the agreement that they were not to be deposited until Villanueva advised Madarang of the
sufficiency of funds in her account. Villanueva insisted that she did not receive any notice from
Madarang regarding the dishonor of the checks.  Ruling of the RTC
13

On January 24, 2002, the RTC rendered its judgment finding Villanueva guilty as charged,  viz:
14

WHEREFORE, in view of the foregoing this Court finds accused Julie Grace K. Villanueva GUILTY
of the crime of estafa as punished under Art. 315 par. 2( d) of the Revised Penal Code in relation to
Presidential Decree No. 818, said crime having been committed in the manner described in the
information filed on September 4, 1995.
As a consequence of this judgment, accused shall suffer the penalty of punishment for a period of
Fourteen Years Eight Months and One Day to Twenty Years which is within the range of Reclusion
Temporal in its medium and maximum periods.

She is also ordered to pay the private complainant Mrs. Loreto Madarang the sum of Nine Hundred
Ninety Five Thousand Pesos (₱995,000.00) plus interest at the legal rate of 12% per annum until the
mount is fully paid with said interest accruing at the time the information was filed on or October 25,
1995.

The period of accused's detention shall be credited in her favor conformably with Art. 29 of the
Revised Penal Code.

She shall serve her entire sentence at the Correccional Institute for Women at Mandaluyong City.

SO ORDERED. 15

Decision of the CA

On appeal, the CA affirmed the conviction but differed on the application of the Indeterminate
Sentence Law, to wit:

Nonetheless, the indeterminate penalty imposed by the trial court, which is 14 years, eight (8)
months and one (1) day to twenty (20) years, both of reclusion temporal, is erroneous. Said court did
not pay obeisance to the teaching of People v. Hernando, viz:

Presidential Decree No. 818 provides:

"SECTION 1. Any person who shall defraud another by means of false pretenses or fraudulent acts
as defined in paragraph 2(d) of Article 315 of the Revised Penal Code, as amended by Republic Act
No. 4885, shall be punished by:

1st. The penalty of reclusion temporal of the amount of fraud is over 12,000 pesos but does not
exceed 22,000 pesos, and if such amount exceeds the latter sum, the penalty provided in this
paragraph shall be imposed in its maximum period, adding one year for each additional 10,000
pesos but the total penalty which may be imposed shall in no case exceed thirty years. In such
cases, and in connection with the accessory penalties which may be imposed under the Revised
Penal Code, the penalty shall be termed reclusion perpetua;

x x x x."

"x x x x

Hence, if the amount of the fraud exceeds twenty two thousand pesos, the penalty of reclusion
temporal is imposed in its maximum period, adding one year for each additional ten thousand
(₱10,000.00) pesos but the total penalty shall not exceed thirty (30) years, which shall be termed
reclusion perpetua. As used herein, reclusion perpetua is not the prescribed penalty for the offense.
It merely describes the penalty actually imposed on account of the amount of the fraud involved,
which exceeds twenty two thousand (₱22,000.00) pesos.

"Under the Indeterminate Sentence Law, if the offense is punished by the Revised Penal Code, such
as estafa, the court shall sentence the accused to an indeterminate penalty, the maximum term of
which shall be that which, in view of the attending circumstances, could be properly imposed under
the rules of the Revised Penal Code, and the minimum term of which shall be within the range of the
penalty next lower to that prescribed by the Code for the offense." "The penalty next lower should be
based on the penalty prescribed by the Code for the offense, without first considering any modifying
circumstance attendant to the commission of the crime. The determination of the minimum penalty is
left by law to the sound discretion of the court and it can be anywhere within the range of the penalty
next lower without any reference to the periods into which it might be subdivided. The modifying
circumstances are considered only in the imposition of the maximum term of the indeterminate
sentence." Here, complainant was defrauded in the amount of seven hundred [thousand]
(₱700,000.00) pesos. The fact that the amount involved in the instant case exceeds ₱22,000.00
should not be considered in the initial determination of the indeterminate penalty; instead the matter
would be so taken as analogous to modifying circumstances in the imposition of the maximum term
of the full indeterminate sentence. This accords with the rule that penal laws are construed in favor
of the accused.

Applying the above-cited provision, accused shall be meted an indeterminate sentence, the
maximum of which shall be taken from the maximum period of the basic penalty, that is, reclusion
temporal, to be imposed in its maximum period, plus one (1) year for each additional ₱10,000.00 of
the amount of the fraud, but the total penalty shall not exceed thirty (30) years. On the other hand,
the minimum of the indeterminate sentence shall be within the range of the penalty next lower in
degree to that prescribed by the Code for the offense, without first considering any modifying
circumstance nor the incremental penalty for the amount of the fraud in excess of twenty two
thousand (₱22,000.00) pesos. Such penalty is prision mayor, with a duration of six ( 6) years and
one ( 1) day to twelve (12) years."

Accordingly, the accused-appellant in the case at bar should be, as she is hereby, sentenced to
suffer the penalty of EIGHT (8) YEARS and ONE (1) DAY of prision mayor, as minimum, to THIRTY
(30) YEARS of reclusion perpetua as maximum.

x x x x. 16

The CA then certified the case to the Court pursuant to Section 13 of Rule 124, Rules of Court.

Issues

Villanueva submits the following errors for our consideration:

THE LOWER COURT ORA VEL Y ERRED IN FINDING ACCUSEDAPPELLANT GUILTY

BEYOND REASONABLE DOUBT OF THE CRIME CHARGED.

II

THE LOWER COURT ORA VEL Y ERRED IN NOT GIVING FULL CREDENCE TO THE
DEFENSE OF ACCUSED-APPELLANT.

III

WHETHER THERE WAS FRAUD PRIOR TO OR SIMULTANEOUS WITH THE ISSUANCE

OF THE SUBJECT POST-DATED CHECKS.
 IV

WHETHER THE ACCUSED APPELLANT IS GUILTY, BEYOND REASONABLE DOUBT,

OF EST AF A. 17

Villanueva insists on the absence of fraud when she drew the postdated checks, averring that: (a)
the checks were issued as replacement; (b) the checks could only be deposited or encashed after
Madarang was notified of the sufficiency of funds; and (c) the receipt presented by the Prosecution
failed to embody the real intention of the parties.  She argues that estafa under paragraph 2( d),
18

Article 315 of the Revised Penal Code was not committed because the checks were not executed
prior to or simultaneous with the alleged fraud; and because Madarang had instigated her to issue
the checks.19

Did Villanueva commit estafa punishable under Article 315, paragraph 2(d), of the Revised Penal
Code in issuing the seven postdated checks?

Ruling of the Court

We affirm the conviction.

Article 315, paragraph 2(d), of the Revised Penal Code provides:

Article 315. Swindling (estafa) - Any person who shall defraud another by any of the means
mentioned hereinbelow x x x:

xxxx

2. By means of any of the following false pretenses or fraudulent acts executed prior to or
simultaneously with the commission of the fraud:

xxxx

(d) By postdating a check, or issuing a check in payment of an obligation when the offender had no
funds in the bank, or his funds deposited therein were not sufficient to cover the amount of the
check. The failure of the drawer of the check to deposit the amount necessary to cover his check
within three (3) days from receipt of notice from the bank and/or the payee or holder that said check
has been dishonored for lack or insufficiency of funds shall be prima facie evidence of deceit
constituting false pretense or fraudulent act.

The estafa charged in the information may be committed, therefore, when: (1) the offender has
postdated or issued a check in payment of an obligation contracted at the time of the postdating or
issuance; (2) at the time of postdating or issuance of said check, the offender has no funds in the
bank, or the funds deposited are not sufficient to cover the amount of the check; and (3) the payee
has been defrauded.  The deceit should be the efficient cause of the defraudation, and should either
20

be prior to, or simultaneous with, the act of the fraud.

21

All the elements of estafa were present. The first element was admitted by Villanueva, who
confirmed that she had issued the checks to Madarang in exchange for the jewelry she had
purchased. There is no question that Madarang accepted the checks upon the assurance of
Villanueva that they would be funded upon presentment. It is clear that Madarang would not have
parted with and entrusted the pieces of valuable jewelry to Villanueva whom she barely knew unless
Villanueva gave such assurance to her. The second element was likewise established because the
checks were dishonored upon presentment due to insufficiency of funds or because the account was
already closed. The third element was also proved by the showing that Madarang suffered prejudice
by her failure to collect from Villanueva the balance of ₱995,000.00.

In her defense, Villanueva adverts to an agreement with Madarang whereby the latter would deposit
or encash the checks only after being informed of the sufficiency of funds in Villanueva's account.
Villanueva posits that the receipt the Prosecution presented in evidence did not embody such
agreement.

This defense of Villanueva is actually anchored on the rule that estafa will not lie when the parties
waive the negotiable character of the check, and instead treat the same as proof of an obligation.
For instance, when there is an agreement between the parties at the time of the issuance and
postdating of the checks that the obligee shall not encash or present the same to the bank, the
obligor cannot be prosecuted for estafa because the element of deceit is lacking. When the payee
was informed that the checks are not covered by adequate funds, bad faith or estafa shall not arise. 22

Villanueva does not impress. Her defense crumbles because she did not present proof of the
supposed agreement.  The receipt signed by her proved the transaction and her issuance of the
1âwphi1

postdated checks by listing the items bought and the postdated checks issued as payment. If the
parties really agreed for Madarang to deposit the checks only after notice of the sufficiency of funds,
then such agreement should have been incorporated in the receipt as an integral part of the
transaction, or simply written in another document with Madarang's express conformity for
Villanueva's protection. We simply cannot accept that Villanueva signed the receipt despite not
including the supposed agreement that would shield her from probable criminal prosecution. In that
regard, her being a businesswoman  presumably made her aware of the consequences of issuing
23

unfunded checks.  All that she is claiming here is that the receipt did not express the true intention of
24

the parties, implying that no written document substantiated her alleged defense. She did not claim
at all that she had been coerced or intimidated into signing the receipt as written. Her self-serving
statements on the agreement were entirely inadequate to establish her assertions, for they were not
proof.25

Under Article 315 2(d) of the Revised Penal Code, as amended by P.D. 818, the penalty for estafa
when the total value of the checks exceed ₱22,000.00 is reclusion temporal in its maximum period
(i.e., 17 years, four moths and one day to 20 years), plus one year for each additional Pl0,000.
Applying the Indeterminate Sentence Law, the minimum term shall be from six years and one day to
12 years of prision mayor. In imposing the indeterminate sentence of eight years and one day of
prision mayor, as minimum, to thirty years of reclusion perpetua as maximum, the CA correctly
applied the Indeterminate Sentence Law. It is well to state that reclusion perpetua merely describes
in this instance the penalty actually imposed on account of the amount of the fraud involved. 26

We note, however, that the CA affirmed the imposition by the RTC of 12% interest accruing from the
time that the information was filed until the full satisfaction of the obligation in the amount of
₱995,000.00. Conformably with the ruling in Nacar v. Gallery Frames  applying Resolution No. 796
27

of the Bangko Sentral ng Pilipinas Monetary Board (BSP-MB), said amount should earn interest of
12% per annum from the filing of the information on September 4, 1995 until June 30, 2013, and
interest of 6% per annum from July 1, 2013 until its full satisfaction. WHEREFORE, the Court
AFFIRMS the decision promulgated on May 25, 2004 by the Court of Appeals, subject to the
MODIFICATION that the amount of ₱995,000.00 shall earn interest 12% per annum from the filing of
the information on September 4, 1995 until June 30, 2013, and interest of 6% per annum from July
1, 2013 until its full satisfaction.
The petitioner shall pay the costs of suit.

SO ORDERED.

LUCAS P. BERSAMIN
Associate Justice

WE CONCUR:

MARIA LOURDES P.A. SERENO

Chief Justice

TERESITA J. LEONARDO-DE CASTRO JOSE PORTUGAL PEREZ

Associate Justice Associate Justice

ESTELA M. PERLAS-BERNABE
Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in
the above Decision were reached in consultation before the case was assigned to the writer of the
opinion of the Court.

MARIA LOURDES P.A. SERENO

Chief Justice

Footnotes

1
 Rollo, pp. 29-46; penned by Court of Appeals Associate Justice Salvador J. Valdez, Jr.
(retired/deceased), with Associate Justice Rebecca De Guia-Salvador (retired) and
Associate Justice Fernanda Lampas Peralta concurring.

2
 RTC records, pp. 300-307.

3
 CA rollo, p. 169.

4
 RTC records, p. 1.

5
 TSN dated March 21, 2001, pp. 4-8.

6
 RTC records, p. 271.

7
 TSN dated March 21, 2001, pp. 8-9.

8
 Exhibits B to H, inclusive; RTC records, pp. 272-274.
9
 TSN dated March 21, 2001, pp. 9-10.

10
 Exhibits I and J; RTC records, pp. 275-277.

11
 RTC records, pp. 5-7.

12
 RTC records, p. 41.

13
 TSN dated July 25, 2001, pp. 3-15.

14
 RTC records, pp. 300-307.

15
 RTC records, pp. 306-307.

16
 CA rollo, pp. 40-42.

17
 Rollo, pp. 23-24.

18
 CA rollo, pp. 48-49.

19
 Rollo, pp. 24-26.

20
 People v. Juliano, G.R. No. 134120, January 17, 2005, 448 SCRA 370, 379.

21
 Reyes, Revised Penal Code, Book II (2006), p. 784.

 Pacheco v. Court of Appeals, G.R. No. 126670, December 2, 1999, 319 SCRA 595, 605-
22

606.

23
 TSN dated July 25, 2001, p. 3.

24
 Chua v. People, G.R. Nos. 150926 and 150930, March 6, 2006, 484 SCRA 161, 168.

25
 Liana v. Court of Appeals, G.R. No. 104802, July 11, 2001, 361 SCRA 27, 34.

26
 Dy v. People, G.R. No. 158312, November 14, 2008, 571SCRA59, 81.

27
 G.R. No. 189871, August 13, 2013, 703 SCRA 439.