Republic of the

Regional Trial Court

Branch
th
8 Judicial Region
Bulwagan ng Katarungan
Tacloban City

NAGPAPAASA LENDING COMPANY

Plaintiff,

Civil Case No. _______

versus

For: Violation of B.P. 22

MS. MANGHIHIRAM
Respondent
x---------------------------------------------------------x

POSITION PAPER
Accused MS. MANGHIHIRAM by counsel respectfully submits her position paper as follows:

I.

Statement of the Case

This is a civil case filled by MAGPAPAASA LENDING COMPANY against the herein respondent
Ms. Manghihiram, for violation of B.P.22.
The offense charge herein was committed at Tacloban City, within the jurisdiction of this Honourable
Court. The respondent herein allegedly issued a check which upon presentment, was subsequently
dishonoured by the drawee bank for lack of funds of credit.

II.

Statement of Facts

Ms. Manghihiram, Head of Di Nagbabayad Department, accommodated her co-workers in

obtaining a loan from Nagpapaasa Lending Company, a corporation engaged in micro credit
financing, amounting to P200,000.00. As part of the requirement, she opened a checking
account and deposited P2,000.00 at Umaasa Bank, plaintiffs sister company. As instructed, she
issued ten (10) blank checks, baring only her signature, to Nagpapaasa Lending Company as
security for the payment of her loan. She was able to pay and make good of the first instalment
payment for her loan. She however defaulted on the rest.
Two years later, Ms. Manghihiram received from Nagpapaasa Lending Company the first
demand for the settlement of her loan. Upon receipt of the demand, Ms Manghihiram through a
text message notified the plaintiff the account she opened with Umaasa Bank has long been
closed, and pleaded for the lending company not to deposit the check she has issued as it will
naturally bounce. She then promised to comply with her obligation as soon as she was able to
collect from her co-workers her being a mere accommodation party. But still Nagpapaasa
Lending Company has deposited the check by placing a date and the amount of P5,000.00 on it.

III.

Issues
A.

Whether or not Nagpapaasa Lending Company can avail Section 14 of Act No. 2031 of the
Negotiable Instruments Law?
B.
Whether or not Miss Manghihiram has violated Batas Pambansa Blg. 22. (B.P. 22)

IV.

Discussions/arguments

IV.1
Nagpapaasa Lending Company cannot avail of Section 14 of Act No. 2031 of the
Negotiable Instruments Law considering that the presumption of authority has been refuted when
Ms. Manghihiram conveyed in her text message not to deposit the check, thus denouncing the
authority given to Nagpapaasa Lending Company to fill in the blanks on said checks.
Section 14 of Act No. 2031 (The Law on Negotiable Instruments) partly provides that:
. . . In order, however, that any such instrument when completed may be
enforced against any person who became a party thereto prior to its completion, it
must be filled up strictly in accordance with the authority given and within a
reasonable time. . . .
In this particular case, the authority previously given by Ms. Manghihiram when she issued
the checks two years ago to Nagpapaasa Lending Company has been withdrawn by her text
message, which the lending company did not take into account.
Further, same Act provides that:
Incomplete instrument not delivered Where an incomplete instrument has not
been delivered, it will not, if completed and negotiated without authority, be a valid
contract in the hands of any holder, as against any person whose signature was placed
thereon before delivery.(Section 15, The Law on Negotiable Instruments)
The authority granted to the lending company by Ms Manghihiram has been withdrawn
through her text message. It can be inferred that the lending company has a fraudulent intent to
incriminate Ms. Manghihiram knowing already that her account has already been closed.
IV.2 Respondent acted in good faith in denouncing the authority of plaintiff to deposit
the check as she opted to inform of the compelling reasons why the check should not be
deposited due to the fact that her account in the bank drawee has been closed. It is a vivid
circumstance of her sincerity to extinguish the onerous pecuniary obligation. Nevertheless, her
efforts to settle the debt is evident in the facts thus, respondent should not be perceived in the
eyes of the law to be in an evasive state in dealing with the liability but instead, one who acted
in good faith with her earnest efforts to quell any irregularity that may arise from the transaction.
IV.3 As to the admissibility of her text message, it is provided under Section6 and 7 of
Republic Act No. 8792 (AN ACT PROVIDING FOR THE RECOGNITION AND USE OF
ELECTRONIC COMMERCIAL AND NON-COMMERCIAL TRANSACTIONS AND
DOCUMENTS, PENALTIES FOR UNLAWFUL USE THEREOF AND FOR OTHER
PURPOSES) that:

Sec. 6. Legal Recognition of Data Messages. - Information shall not be

denied legal effect, validity or enforceability solely on the grounds that it is in
the data message purporting to give rise to such legal effect, or that it is
merely referred to in that electronic data message.
Sec. 7. Legal Recognition of Electronic Documents. Electronic documents
shall have the legal effect, validity or enforceability as any other document
or legal writing, and (a) Where the law requires a document to be in writing, that
requirement is met by an electronic document if the said electronic
document maintains its integrity and reliability and can be
authenticated so as to be usable for subsequent reference, in that (i) The electronic document has remained complete and
unaltered, apart from the addition of any endorsement and any
authorized change, or any change which arises in the normal
course of communication, storage and display; and
(ii) The electronic document is reliable in the light of the purpose
for which it was generated and in the light of all the relevant
circumstances.
(b) Paragraph (a) applies whether the requirement therein is in the
form of an obligation or whether the law simply provides consequences
for the document not being presented or retained in its original form.
(c) Where the law requires that a document be presented or retained in
its original form, that requirement is met by an electronic document if (i) There exists a reliable assurance as to the integrity of the
document from the time when it was first generated in its final
form; and
(ii) That document is capable of being displayed to the person to
whom it is to be presented: Provided, That no provision of this
Act shall apply to vary any and all requirements of existing laws
on formalities required in the execution of documents for their
validity.
For evidentiary purposes, an electronic document shall be the functional
equivalent of a written document under existing laws.
This Act does not modify any statutory rule relating to the admissibility of
electronic data messages or electronic documents, except the rules relating
to authentication and best evidence.
IV.4 The text message can be considered as the . . . functional equivalent of a written
document under existing laws. In addition, the fact that Ms. Manghihiram has informed
Nagpapaasa Lending Company through text message, an electronic message which is admissible
and has legal recognition to be used as evidence of information relayed by the respondent. That
the account she has opened with Umaasa Bank has already been closed, and that she even
pleaded for the lending company not to deposit the check for it will naturally bounce, acquits her
for being liable under Batas Pambansa 22 or the Bouncing Checks Law.

In Yu Oh vs. Court of Appeals the Court held that there is no

violation of B.P. Blg.
22, if complainant was actually told by the drawer
that he has no sufficient funds in the
bank.
IV.5 Moreover, the lending company is presumed to have knowledge of the status of
the account of Ms Manghihiram considering that Umaasa Bank, the drawee bank, is its sister
company. If the bank will file a complaint against Ms. Manghihiram for issuing a check with
insufficient funds, then Nagpapaasa Lending Company will likewise be liable, knowing at the
time that when it negotiated the check there will be no funds to cover it. That there is no way that
both the lending company and its sister company, the drawee bank could not be able to know the
status of the insufficiency of funds of Ms. Manhihiram. The lending company did not take heed
of the express information conveyed by Ms. Manghihiram and still pursued its fraudulent act of
incriminating the latter by depositing the check.
Section 2. Establishes prima facie evidence of knowledge of
such insufficiency of funds or credit.
The making, drawing and
issuance of a check, payment of which is refused by the drawee
because of insufficient funds in or credit with such bank, is a prima
facie evidence of knowledge of insufficiency of funds or credit, when
the check is presented within 90 days from the date of the check.
In people vs. Laggui, supra, it was held that the makers
knowledge of the insufficiency of his funds is legally presumed
dishonour of his check for insufficiency of funds.
IV.6 B.P. 22 may be violated by issuing a check either for payment of an obligation or
as a guarantee to an obligation. In this case, Ms. Manghihiram issued the ten checks as instructed
by the lending company, as part of the requirement of the loan in which she served as an
accommodation party of her co-workers.
B.P. Blg. 22 . . . does not distinguish but merely provides that
"[a]ny person who
makes or draws and issues any check knowing at the
time of issue that he does not have
sufficient funds in or credit with the
drawee bank . . . which check is subsequently dishonored. x x x shall be
punished by imprisonment . x x x Ubi lex non distinguit nec nos distinguere
debemus.
It is common practice in commercial transactions to require
debtors to issue checks on which creditors must rely as guarantee of
payment. To determine the reasons
for which checks are issued or the
terms and conditions for their issuance, will greatly erode the faith the
public responses in the stability and commercial value of checks as
currency substitutes and bring about havoc in the trade and banking
system. (People vs.
Nitafan)
IV. 7 We feel aggrieved that the acts of the plaintiff was otherwise. Being the holder of the
checks, plaintiff manifested abuse of confidence to the respondent even when the have knowledge of the
insufficiency of funds and was fully informed of the matter and was subsequently pleaded with other
means to settle her obligation, still plaintiff was unmindful of these and pursued the incriminating act.
Such act is a manifestation of plaintiffs vehement premeditation to incriminate Ms. Manghihiram, our
unfortunate client that is lucid and flagrant in the eyes of the law.
the

The rationale behind B.P. Blg. 22 was initially explained by the Court in
landmark case of Lozano vs. Martinez where they held that:

The gravemen of the offense punished by B.P. Blg. 22 is the act

of making and
issuing a worthless check or a check that is dishonoured
upon its presentation for
payment . . . The thrust of the law is to
prohibit, under pain of penal sanctions, the
making or worthless checks
and putting them in circulation. Because of its deleterious effects on the
public interest, the practice is proscribed by law. The law punished the
act not as an
offense against property, but an offense against
public
order.
The effects of the issuance of a worthless check transcend the
private interests of the parties directly involved in the transaction and touch
the interests of the
community at large. The mischief it creates is not
only a wrong to the payee or holder
but also an injury to the public.
The harmful practice of putting valueless commercial
papers
in
circulation, multiplied a thousandfold, can very well pollute the channels of
trade and commerce, injure the banking system and eventually hurt
the welfare of
society and the public interest.
The same is reiterated in Cueme vs. People:
B.P. Blg. 22 was purposely enacted to prevent the proliferation of
worthless checks in the mainstream of daily business and to avert not
only the undermining of the banking system of the country but also the
infliction of damage and injury upon trade and commerce occasioned
by the indiscriminate issuances of such checks. By its very nature, the
offenses defined under B.P. Blg. 22 are against public interest.
The Bouncing Checks Law was devised to safeguard the interest of
the banking system
and the legitimate public checking account user. It was
not designed to favour or encourage those who seek to enrich themselves through
manipulation and circumvention of the
purpose of the law. Noteworthy, In
Administrative Circular No. 12-2000, this Court has expressed a policy preference
or fine as penalty in cases of B.P. 22 violation rather than imprisonment to best
serve the ends of criminal justice. Moreover, while the Philosophy
underlying
our penal system leans towards the classical school that imposes penalties for
retribution, such retribution should be aimed at actual and potential
wrongdoers. (Griffith vs. Court of Appeals, 379 SCRA 94)
WHEREFORE, premises considered, respondent Ms. Manghihiram respectfully, and humbly
prays that the complaint against her be DISMISSED.

Tacloban City; October 26, 2009

MS. MANGHIHIRAM
Respondent
ATTY. XXX
Roll No. 69969
IBP LIFETIME NO. 666999
MCLE COMPLIANCE NUMBER II-082080
PTR NO. 200980;10-28-09;Tac., Leyte
Counsel for the respondent

Copy furnished
Atty. Iara Charmaine A. Maderaso, M.D.
Assistant Provincial Prosecutor
Office of the Provincial Prosecutor of Leyte
Bulwagan ng Katarungan, Magsaysay Boulevard,
Tacloban City

VERIFICATION
I MS. MANGHIHIRAM, of legal age, Filipino, under oath as follows:
1. I am the accused of the above captioned case.
2. I have caused the preparation and filing of this Position Paper. I have
read the allegations of the position paper and the same are true and
correct according to my personal knowledge and the authentic records
in my possession.
In WITNESS WHEREOF, I have affixed my signature this ____ day of October 2009
at Tacloban City.

MS. MANGHIHIRAM
Affiant
Subscribed and Sworn before me this ____ day of October 2009, by the above named
person/s who exhibited his/her/their identification card(s), the particulars of which are indicated
beside his/her/their name(s):
Name

Identification Card & No.

Issued on/at

Ms. Manghihiram

And who is/are[ ] personally known to me; or

[ ] his/her/their identity(ies) having been proved to me through competent evidence
[ ] identification card indicated above

Doc No. _______

Page No. ______
Book No. ______
Series of 2009