G.R. No.

126713 July 27, 1998

ADORACION E. CRUZ, THELMA DEBBIE E. CRUZ and GERRY E. CRUZ, petitioners,

vs.

COURT OF APPEALS and SPOUSES ELISEO and VIRGINIA MALOLOS, respondents.

PANGANIBAN, J.:

Contracts Continue the law between the parties. They must be read together and interpreted in a
manner that reconciles and gives life to all them. The intent of the parties, as shown by the clear
language used, prevails overpost facto explanations that find no support from the words employed
by the parties or from their contemporary and subsequent acts showing their understanding of such
contracts. Furthermore, subsequent agreement cannot novate or change by implication a previous
one, unless the old and the new contracts are, on every point, incompatible with each other. Finally,
collateral facts may be admitted in evidence when a rational similarity exists between the conditions
giving rise to the fact offered and the circumstances surrounding the issue or fact to be proved.

The Case

Before us is a petition for review on certiorari seeking to nullify the Court of Appeals (CA)
Decision in CA-GR CV 33566, promulgated July 15, 1996, which reversed the Regional Trial
1

Court (RTC) of Antipolo, Rizal; and the CA Resolution of October 1, 1996, which denied
2

petitioners' Motion for Reconsideration.

Petitioners Adoracion, Thelma Debbie, Gerry and Arnel (all surnamed Cruz) filed an action for
partition against the private respondents, Spouses Eliseo and Virginia Malolos. On January
28, 1991, the trial court rendered a Decision which disposed as follows: 3

WHEREFORE, judgment is hereby rendered for the plaintiffs and against the
defendants-spouses —

1. Ordering the partition of the seven parcels of land totaling 1,912 sq. m.
among the four (4) plaintiffs and the defendants-spouses as follows:

a. Adoracion E. Cruz (1/5) 382 sq. m.

b. Thelma Debbie Cruz (1/5) 382 sq. m.

c. Gerry E. Cruz (1/5) 382 sq. m.

d. Arnel E. Cruz (1/5) 382 sq. m.

e. Spouses Eliseo and

Virginia Malolos (1/5) 382 sq. m.

 to whom Lot No. 1-C-2-B-2-B-4-L-1-A with an area
of 276 sq. m. covered by TCT No. 502603 and a
portion of Lot No. 1-C-2-B-2-B-4-L-1-B covered by
TCT No. 502604 to the extent of 106 sq. m.
adjoining TCT No. 502603.

2. Ordering the parties herein to execute a project of partition in accordance

[with] this decision indicating the partition of the seven (7) parcels of land
within fifteen (15) days upon receipt of this judgment.

3. Ordering defendants-spouses to pay plaintiffs herein P5,000.00 as and for

attorney's fees;

4 Costs of suit.

On appeal, Respondent Court reversed the trial court thus: 4

WHEREFORE, finding the appeal to be meritorious, We REVERSE the appealed

decision and render judgment DISMISSING the complaint without prejudice
however to the claim of plaintiff-appellees for their shares in the proceeds of
the auction sale of the seven (7) parcels of land in question against Nerissa
Cruz Tamayo pursuant to the Memorandum Agreement.

Cost against the plaintiff-appellees.

As earlier stated, reconsideration was denied through the appellate court's challenged
Resolution: 5

WHEREFORE, for lack of merit, the Motion for Reconsideration is DENIED.

The Antecedent Facts

The facts of this case are undisputed. The assailed Decision relates them as follows: 6

Delfin I. Cruz and Adoracion Cruz were spouses and their children were
Thelma, Nerissa, Arnel and Gerry Cruz. Upon the death of Delfin I. Cruz, [his]
surviving spouse and children executed on August 22, 1977 a notarized Deed
of Partial Partition (Exhibit 2) by virtue of which each one of them was given a
share of several parcels of registered lands all situated in Taytay, Rizal.

The following day, August 23, 1977, the same mother and children executed a
Memorandum Agreement (Exhibit H) which provided;

That the parties hereto are common co-owners pro-indiviso in

equal shares of the following registered real properties, all
situated at Taytay, Rizal, Philippines, . . . .

xxx xxx xxx

That sometime on August 22, 1977, a Deed of Partial Partition

was executed among us before Atty. Virgilio J. Tamayo, Notary
 Public on and for the Province of Rizal, per Doc. No. 1776; Page
No. 14; of his Notarial Register No. XLIX, Series of 1977;

xxx xxx xxx

That as a result of said partial partition, the properties affected

were actually partitioned and the respective shares of each
party, adjudicated to him/her;

That despite the execution of this Deed of Partial Partition and

the eventual disposal or sale of their respective shares, the
contracting parties herein covenanted and agreed among
themselves and by these presents do hereby bind themselves to
one another that they shall share alike and receive equal shares
from the proceeds of the sale of any lot or lots allotted to and
adjudicated in their individual names by virtue of this deed of
partial partition."

That this Agreement shall continue to be valid and enforceable

among the contracting parties herein up to and until the last lot
covered by the Deed of [P]artial [P]artition above adverted to
shall have been disposed of or sold and the proceeds thereof
equally divided and their respective shares received by each of
them.

This Memorandum Agreement was registered and annotated in the titles of the
lands covered by the Deed of Partial Partition.

Subsequently, the same parties caused the consolidations and subdivisions of

the lands they respectively inherited from the late Delfin I. Cruz per Deed of
Partial Partition After that they registered the Deed of Partial Partition and
subdivision plans and titles were issued in their names. In the case of Nerissa
Cruz Tamayo, the following titles were issued to her in her name: TCT No.
502603 (Exhibit A), TCT No. 502604 (Exhibit B), TCT No. 502605 (Exhibit C), TCT
No. 502606 (Exhibit D), TCT No. 502608 (Exhibit E), TCT No. 502609 (Exhibit F),
TCT No. 502610 (Exhibit G), hereinafter called the lands in question. Naturally,
the annotation pertaining to the Memorandum Agreement was carried in each
of said seven (7) titles and annotated in each of them.

Meanwhile, the spouses Eliseo and Virginia Malolos filed Civil Case No. 31231
against the spouses Nerissa Cruz-Tamayo and Nelson Tamayo for a sum of
money. The Court of First Instance of Rizal, Branch XVI (Quezon City) rendered
a decision on June 1, 1981 in favor of Eliseo and Virginia condemning the
spouses Nerissa and Nelson Tamayo to pay them P126,
.00 xwith 12% interest per annum from the filing of the complaint plus
P5,000.00 attorney's fee. After the finality of that decision, a writ of execution
(Exhibit J) was issued on November 20, 1981.

Enforcing said writ, the sheriff of the court levied upon the lands in question.
On June 29, 1983, these properties were sold in an execution sale to the
highest bidders, the spouses Eliseo and Virginia Malolos. Accordingly, the
sheriff executed a Certificate of Sale (Exhibit K) over —
 . . . all the rights, claims, interests, titles, shares, and
participations of defendant spouses Nerissa Tamayo and Nelson
Tamayo. . .

Nerissa Cruz Tamayo failed to exercise her right of redemption within the
statutory period and so the final deed of sale was executed by the sheriff
conveying the lands in question to spouses Eliseo and Virginia Malolos. The
Malolos couple asked Nerissa Cruz Tamayo to give them the owner's duplicate
copy of the seven (7) titles of the lands in question but she refused. The couple
moved the court to compel her to surrender said titles to the Register of Deeds
of Rizal for cancellation. This was granted on September 7, 1984. But Nerissa
was adamant. She did not comply with the Order of the court and so the
Malolos couple asked the court to declare said titles as null and void.

At this point, Adoracion Cruz, Thelma Cruz, Gerry Cruz and Arnel Cruz entered
the picture by filing in said lower court a motion for leave to intervene and
oppose [the] Maloloses' motion. The Cruzes alleged that they were co-owners
of Nerissa Cruz Tamayo over the lands in question.

On January 18, 1985, said court issued an Order modifying the Order of
September 7, 1984 by directing the surrender of the owner's duplicate copies
of the titles of the lands in question to the Register of Deeds not for
cancellation but for the annotation of the rights, and interest acquired by the
Maloloses over said lands.

On February 17, 1987, Adoracion, Thelma, Gerry and Arnel Cruz filed Civil Case
No. 961-A for Partition of Real Estate against spouses Eliseo and Virginia
Malolos over the lands in question.

As already stated in the first paragraph of this Decision, the court a

quo rendered a decision in favor of the plaintiffs from which the defendants
appealed to this court. . . . .

Ruling of the Court of Appeals

For Respondent Court, the central issue was: "Did the Memorandum of Agreement [MOA]
(Exhibit H) revoke, cancel or supersede the Deed of Partial Partition [DPP] (Exhibit 2)?" If
7 8

so, then petitioners and Spouses Tamayo were co-owners of the land in issue, and partition
should ensue upon motion of the former; if not, then the latter are its absolute owners and no
partition should be made.

Respondent Court resolved the above question in the negative for the following reasons:

First, the DPP was not materially and substantially incompatible with the MOA. The DPP
conferred absolute ownership of the parcels of land in issue on Nerissa Cruz Tamayo, while
the MOA merely created an obligation on her part to share with the petitioners the proceeds
of the sale of said properties.

Second, the fact that private respondents registered the DPP was inconsistent with the
allegation that they intended to abandon it. Indeed, had they meant to abandon it, they would
have simply gathered the copies of said document and then torn or burned them.
Third, petitioners were estopped from claiming co-ownership over the disputed properties
because, as absolute owners, they either mortgaged or sold the other properties adjudicated
to them by virtue of the DPP.

Hence, this petition. 9

Assignment of Errors

In their Memorandum, petitioners submit the following assignment of errors;

10

A. Respondent Court erred in ruling that the Memorandum of

Agreement (Exhibit "H") does not prevail over the Deed of Partial
Partition (Exhibit 2).

B. Respondent Court erred in ruling that petitioners can only

claim their right to the proceeds of [the] auction sale.

C. Respondent Court erred in ruling that petitioners are in

estoppel by deed.

D. Respondent Court erred in ruling that the registration of the

deed of partial partition precluded the petitioners from
abrogating it.

E. Respondent Court erred when it completely ignored the

finality of the order of the Regional Trial Court of Quezon City,
Branch LXXXVI as embodied in the decision of the Regional Trial
Court of Antipolo, Rizal, Branch 71.

In fine, the resolution of this petition hinges on the following issues: (1) whether the DPP was
cancelled or novated by the MOA; (2) whether the MOA established, between petitioners and
the judgment debtor, a co-ownership of the lots in question; (3) whether petitioners are
barred by estoppel from claiming co-ownership of the seven parcels of land; and (4)
whether res judicata has set in.

The Court's Ruling

The petition is bereft of merit. It fails to demonstrate any reversible error on the part of the
Court of Appeals.

First Issue: No Novation or Cancellation

In their Memorandum, petitioners insist that the MOA categorically and unmistakably named
and covenanted them as co-owners of the parcels in issue and novated their earlier
agreement, the Deed of Partial Partition.

Petitioners claim that the MOA clearly manifested their intention to create a co-ownership.
This is particularly evident in Exhibit 1-B, which provides:

That despite the execution of this Deed of Partial Partition and eventual
disposal or sale of their respective shares, the contracting parties herein
 covenanted and agreed among themselves and by these presents do hereby
bind themselves to one another that they shall share and receive equal shares
from the proceeds of the Sale of any lot or lots allotted to and adjudicated in
their individual names by virtue of this deed of partial partition.

The Court disagrees. The foregoing provision in the MOA does not novate, much less cancel,
the earlier DPP. Novation, one of the modes of extinguishing an obligation, requires the
concurrence of the following: (1) there is a previous valid obligation; (2) the parties
concerned agree to a new contract; (3) the old contract is extinguished; and (4) there is a
valid new contract. Novation may be express or implied. Article 1292 of the Code provides:
11

"In order that an obligation may be extinguished by another which substitutes the same, it is
imperative that it be so declared in unequivocal terms [express novation], or that the old
12

and the new obligations be on every point incompatible with each other [implied novation].

Tested against foregoing standards, petitioners' stance is shattered to pieces. The stipulation
that the petitioners and Spouses Tamayo were co-owners was merely the introductory part of
the MOA, and it reads: 13

That the parties are common co-owners pro-indiviso in equal shares of the
following registered real properties, all situated at Taytay, Rizal,
Philippines. . . .

xxx xxx xxx

That sometime on August 22, 1977, a Deed of Partial Partition was executed
among us before Atty. Virgilio J. Tamayo, Notary Public in and for the Province
of Rizal, per. Doc. No. 1796; Page No. 14; of his Notarial Register No. XLIX,
Series of 1977;

Following the above-quoted stipulation is a statement that the subject parcels of land
had in fact been partitioned, but that the former co-owner intended to share with
petitioners the proceeds of any sale of said land, viz.:
14

That [as] a result of said partial partition, the properties affected were actually
partitioned and the respective shares of each party, adjudicated to him/her;

That despite the execution of this Deed of Partial Partition and the eventual
disposal or sale of their respective shares, the contracting parties herein
covenanted and agreed among themselves [and] to one another that they shall
do [sic] hereby bind themselves to one another that they shall share alike and
receive equal shares from the proceeds of the sale of any lot or lots allotted to
and adjudicated in their individual names by virtue of this deed of partial
partition;

That this Agreement shall continue to be valid and enforceable among the
contracting parties herein up to and until the last lot covered by the deed of
partial partition above adverted to shall have been disposed of or sold and the
proceeds thereof equally divided and their respective shares received by each
of them.

xxx xxx xxx

The MOA falls short of producing a novation, because it does not express a clear intent to
dissolve the old obligation as a consideration for the emergence of the new one. Likewise,
15

petitioners fail to show that the DPP and the MOA are materially; and substantially
incompatible with each other. Petitioners admit that, under the MOA, they and the Tamayo
spouses agreed to equally share in the proceeds of the sale of the lots. Indeed, the DPP
16

granted title to the lots in question to the co-owner to whom they were assigned, and the
MOA created an obligation on the part of such co-owner to share with the others the
proceeds of the sale of such parcels. There is no incompatibility between these two
contracts.

Verily, the MOA cannot be construed as a repudiation of the earlier DPP. Both documents can
exist together and must be so interpreted as to give life to both. Respondent Court aptly
explained: 17

The Deed of Partial Partition conferred upon Nerissa Cruz Tamayo absolute
ownership over the lands in question. The Memorandum of Agreement merely
created an obligation on the part of absolute owner Nerissa Cruz Tamayo to
share [with] the appellees with [sic] the proceeds of the sale of said properties.

The obligation of the owner of a piece of land to share [with] somebody with
[sic] its fruits or the proceeds of its sale does not necessarily impair his
dominion over the property much less make the beneficiary his co-owner
thereof.

All in all, the basic principle underlying this ruling is simple: when the text of a contract is
explicit and leaves no doubt as to its intention, the court may not read into it any other
intention that would contradict its plain import. The hornbook rule on interpretation of
18

contracts gives primacy to the intention of the parties, which is the law among them.
Ultimately, their intention is to be deciphered not from the unilateralpost facto assertions of
one of the parties, but from the language used in the contract. And when the terms of the
agreement, as expressed in such language, are clear, they are to be understood literally, just
as they appear on the face of the contract.

Indeed, the legal effects of a contract are determined by extracting the intention of the parties
from the language they used and from their contemporaneous and subsequent acts. This 19

principle gains more force when third parties are concerned. To require such persons to go
beyond what is clearly written in the document is unfair and unjust. They cannot possibly
delve into the contracting parties' minds and suspect that something is amiss, when the
language of the instrument appears clear and unequivocal.

Second Issue: No Co-ownership in the MOA

Petitioners contend that they converted their separate and individual ownership over the
lands in dispute into a co-ownership by their execution of the MOA and the annotation
thereof on the separate titles.

The Court is not convinced. The very provisions of the MOA belie the existence of a co-
ownership. First, it retains the partition of the properties, which petitioners supposedly
placed in co-ownership; and, second, it vests in the registered owner the power to dispose of
the land adjudicated to him or her under the DPP. These are antithetical to the petitioners'
contention. In a co-ownership, an undivided thing or right belongs to two or more
persons. Put differently, several persons hold common dominion over a spiritual (or idea)
20
part of a thing, which is not physically divided. In the present case, however, the parcels of
21

land in the MOA have all been partitioned and titled under separate and individual names.
More important, the MOA stipulated that the registered owner could sell the land without the
consent of the other parties to the MOA. Jus disponendi is an attribute of ownership, and
only the owner can dispose of a property. 22

Contrary to petitioner's claim, the annotation of the MOA in the certificate of title did not
engender any co-ownership. Well-settled is the doctrine that registration merely confirms,
but does not confer, title. It does not give the holder any better title than what he actually
23

has. As earlier observed, the MOA did not make petitioners co-owners of the disputed
parcels of land. Hence, the annotation of this document in the separate certificates of title did
nor grant them a greater right over the same property.

Third Issue: Estoppel by Deed

Respondent Court found that several deeds of sale and real estate mortgage, which
petitioners executed when they sold or mortgaged some parcels adjudicated to them under
the DPP, contained the statement that the vendor/mortgagor was the absolute owner of the
parcel of residential land and that he or she represented it as free from liens and
encumbrances. On the basis of these pieces of evidence, Respondent Court held that
petitioners were estopped from claiming that there was a co-ownership over the disputed
parcels of land which were also covered by the DPP. Petitioners contend that Respondent
Court, in so ruling, violated the res inter alios acta rule.

ISSUE: Whether or not MOA established co-ownership of DPP.

Petitioners' contention is untenable. Res inter alios acta, as a general rule, prohibits the
admission of evidence that tends to show that what a person has done at one time is
probative of the contention that he has done a similar acts at another time. Evidence of
24

similar acts or occurrences compels the defendant to meet allegations that are not
mentioned in the complaint, confuses him in his defense, raises a variety of irrelevant issues,
and diverts the attention of the court from the issues immediately before it. Hence, this
evidentiary rule guards against the practical inconvenience of trying collateral issues and
protracting the trial and prevents surprise or other mischief prejudicial to litigants.
25

The rule, however, is not without exception. While in admissible in general, collateral facts
may be received as evidence under exceptional circumstances, as when there is a rational
similarity or resemblance between the conditions giving rise to the fact offered and the
circumstances surrounding the issue or fact to be proved. Evidence of similar acts may
26

frequently become relevant, especially in actions based on fraud and deceit, because it
sheds light on the state of mind or knowledge of a person; it provides insight into such
person's motive or intent; it uncovers a scheme, design or plan; or it reveals a mistake. 27

In this case, petitioners argue that transactions relating to the other parcels of land they
entered into, in the concept of absolute owners, are inadmissible as evidence to show that
the parcels in issue are not co-owned. The Court is not persuaded. Evidence of such
transactions falls under the exception to the rule on res inter alios acta. Such evidence is
admissible because it is relevant to an issue in the case and corroborative of evidence
already received. The relevancy of such transactions is readily apparent. The nature of
28

ownership of said property should be the same as that of the lots in question since they are
all subject to the MOA. If the parcels of land were held and disposed by petitioners in fee
simple, in the concept of absolute owners, then the lots in question should similarly be
treated as absolutely owned in fee simple by the Tamayo spouses. Unmistakably, the
evidence in dispute manifests petitioners' common purpose and design to treat all the
parcels of land covered by the DPP as absolutely owned and not subject to co-ownership. 29

Under the principle of estoppel, petitioners are barred from claiming co-ownership of the
lands in issue. In estoppel, a person, who by his deed or conduct has induced another to act
in a particular manner, is barred from adopting an inconsistent position, attitude or course of
conduct that thereby causes loss or injury to another. It further bars him from denying the
30

truth of a fact which has, in the contemplation of law, become settled by the acts and
proceeding of judicial or legislative officers or by the act of the party himself, either by
conventional writing or by representations, express or implied or in pais. 31

In their transactions with others, petitioners have declared that the other lands covered by
the same MOA are absolutely owned, without indicating the existence of a co-ownership over
such properties. Thus, they are estopped from claiming otherwise because, by their very own
acts and representations as evidenced by the deeds of mortgage and of sale, they have
denied such co-ownership. 32

Fourth Issue: No Res Judicata On Co-ownership

Petitioners argue that the Order (Exhibit J) dated January 18, 1985, issued by the RTC of
33

Quezon City, Branch 86, which had long become final and executory, confirmed their co-
ownership. Thus, they claim that Respondent Court's reversal of the ruling of the RTC of
Antipolo, Rizal, is a violation of the rule on res judicata.

This contention is equally untenable. The elements of res judicata are: (1) the former
judgment was final; (2) the court which rendered it had jurisdiction over the subject matter
and the parties; (3) the judgment was on the merits; and (4) the parties, subject matters and
causes of action in the first and second actions are identical.
34

The RTC of Quezon City had no jurisdiction to decide on the merits of the present case or to
entertain questions regarding the existence of co-ownership over the parcels in dispute,
because the suit pending before it was only for the collection of a sum of money. Its
disquisition on co-ownership was merely for the levy and the execution of the properties of
the Tamayo spouses, in satisfaction of their judgment debt to the private respondents.

Perhaps more glaring is the lack of identity between the two actions. The first action before
the RTC of Quezon City was for the collection of money, while the second before the RTC of
Antipolo, Rizal, was for partition. There being no concurrence of the elements of res
judicata in this case, the Court finds no error in Respondent Court's ruling. No further
discussion is needed to show the glaring difference between the two controversies.

WHEREFORE, the petition is hereby DENIED and the assailed Decision is AFFIRMED. Cost
against petitioners.

SO ORDERED.

G.R. No. 108738 June 17, 1994

ROBERTO CRUZ, petitioner,
vs.
COURT OF APPEALS, PEOPLE OF THE PHILIPPINES, respondents.

Arsenio N. Mercado for petitioner.

The Solicitor General for the People of the Philippines.

KAPUNAN, J.:

The sole issue to be resolved in the instant petition is whether or not petitioner is liable for violation
of Batas Pambansa Bilang 22 for issuing a check knowing he does not have credit with drawee bank
and thereafter claiming that the said check was not intended for circulation and negotiation, the
same having been issued only to serve as mere evidence or memorandum of indebtedness.

The relevant antecedents are as follows, viz:

Complaining witness Andrea Mayor is a businesswoman engaged, among others, in granting

interest-bearing loans and in rediscounting checks. Sometime in 1987, she was introduced to
1

herein petitioner, Roberto Cruz who at that time was engaged in the business of selling ready-to-
wear clothes at the Pasay Commercial Center. From then on, petitioner has been borrowing money
2

from Mayor. On March 15, 1989, petitioner borrowed from Andrea Mayor one hundred seventy six
3

thousand pesos (P176,000.00). On April 6, 1989, Mayor delivered the said amount to petitioner
4

himself in the latter’s stall at the Pasay Commercial Center. Cruz, in turn, issued Premiere Bank
Check No. 057848 postdated April 20, 1989 for same amount. When the check matured,
5

complaining witness presented it to the drawee bank for payment but the same was dishonored and
returned for reason "account closed." When notified of the dishonor, petitioner promised to pay his
obligation in cash. No payment was made, hence, an information for violation of Batas Pambansa
Bilang 22 was filed against the petitioner. 6

Upon arraignment, petitioner entered a plea of not guilty. 7

At the pre-trial, petitioner admitted the existence of the check. 8

During trial, the prosecution presented two (2) witnesses, Andrea Mayor, herein complainant, and
Marcelo Ladao, a representative of Premiere Development Bank.

Andrea Mayor testified that she is a businesswoman engaged in the business, among others, of
rediscounting checks and lending money at an interest of 3% to 5% monthly; that she came to know
the accused Roberto Cruz through the latter’s sisters sometime in 1987; that the accused is
engaged in the RTW business at the Pasay Commercial Center; that she rediscounted some of the
checks of the accused in previous transactions as shown by Exhibits "C," "C-1" to "C-3," in the
amounts of P20,000.00, P5,000.00, P9,000.00, and P5,000.00 respectively, which were personal
checks issued by the accused for the sums he borrowed and which checks bounced when
presented for payment but were paid in cash by the accused when the latter was notified of the
dishonor. 9

Complaining witness Andrea Mayor further testified that on March 15, 1989, accused told her that he
needed P176,000.00 and asked to be lent the said amount; that complainant gave the accused the
said amount at the latter’s store at the Pasay City Commercial Center; that accused, in turn, issued a
check for the same amount; that the check was signed in her presence and she was told that
10

accused might be able to pay before the due date on April 20, 1989; that the check was dishonored
upon presentment by the drawee bank; that accused was notified of the dishonor and he promised
to raise the amount on May 15, 1989; that accused failed to make good his commitment, hence, she
consulted a lawyer and caused the preparation of a complaint. 11

Marcelo Ladao, a representative of Premiere Development Bank, testified that accused opened
Current Account No. 0101-00250-5 on May 15, 1987 and, accordingly, affixed three (3) signatures
on the signature card provided by the bank for account applicants; that the said account was closed
on October 2, 1989 and that accused was duly advised of the said closure by the Branch Manager of
the Pasay City Branch. Ladao, likewise, identified the stamp marked on the face of the check in
question, which stamp indicated that the account of the depositor is already closed. On cross-
12

examination, the same witness explained that the subject account was closed at the discretion of the
branch manager and that closure is normally a result of a series of checks issued without sufficient
funds. 13

The accused testified in his defense and proffered the defense of denial. He denied (a) having
issued the subject check; (b) the signature "R. Cruz" appearing thereon as his; and (c) knowing
complainant Andrea Mayor and existence of previous transactions with her. He declared that he
14

saw the check in question for the first time only on January 16, 1991 when it was showed to him by
the fiscal and that he never met Andrea Mayor before. He admitted, however, opening Current
15

Account No. 0101-00250-37 with Premiere Development Bank. 16

The trial court rejected accused’s defense and rendered judgment as follows, to wit:

IN VIEW OF THE FOREGOING, accused is hereby found guilty beyond reasonable

doubt of the offense charged in the information, and conformably with the penal
provision of Batas Pambansa Blg. 22, accused is hereby sentenced to suffer the
straight penalty of one (1) year imprisonment and to indemnify the offended party in
the amount of P176,000.00, Philippine Currency. With costs. 17

Aggrieved by the ruling, petitioner appealed the case to the Court of Appeals.

On January 26, 1993, the Court of Appeals rendered judgment affirming the trial court’s decision. 18

Now petitioner comes to this Court by way of a petition for review on certiorari seeking the reversal
of the respondent court’s decision. Petitioner cites the following for allowance of his petition, viz:

A. Respondent Court Committed Reversible Error and Grave Abuse Of Discretion

Amounting To Lack Or Excess Of Jurisdiction in Affirming The Finding of The Trial
Court On The Basis Of Surmises, Conjectures and Unfounded Conclusions.

xxx xxx xxx

B. Respondent Court Gravely Erred In Holding The Petitioner Liable Under BP No.
22, Despite Knowledge of the Complaining Witness That The Account Had Long
been Closed.

xxx xxx xxx

 C. Respondent Court Gravely Erred In Holding That The "Complete Turnabout" of
the Petitioner, As Claimed By The Solicitor General, Rendered Petitioner’s Appeal
Devoid of Merit.

xxx xxx xxx 19

Petitioner, in this case, cannot seem to make up his mind. First, he denies having issued the
questioned check, then, he claims that when he issued the same, it was more in the nature of a
memorandum of indebtedness and, as such, does not fall within the purview of Batas Pambansa
Blg. 22.

However, the issuance of the check subject of the present case is no longer at issue since the
petitioner himself, on appeal to the respondent court, admitted having issued the check after he
received the amount of P176,000.00 from the complaining witness. Therefore, the only issue in the
case at bench is whether or not petitioner can be convicted for violation of B.P. 22.

We answer in the affirmative.

A check issued as an evidence of debt, though not intended to be presented for payment has the
same effect of an ordinary check, hence, falls within the ambit of B.P. 22 which merely provides
20

that "any person who makes or draws and issues any check to apply for an account or for value,
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 by the drawee bank for insufficiency of funds on
credit . . . shall be punished by imprisonment
. . ."
21

When a check is presented for payment, the drawee bank will generally accept the same regardless
of whether it was issued in payment of an obligation or merely to guarantee the said obligation. What
the law punishes is the issuance of a bouncing check not the purpose for which it was issued nor
22

the term and conditions relating to its issuance. The mere act of issuing a worthless check is malum
prohibitum. This point has been made clear by this Court, thus:
23

It is now settled that Batas Pambansa Bilang 22 applies even in cases where
dishonored checks are issued merely in the form of a deposit or a guarantee. The
enactment in question does not make any distinction as to whether the checks within
its contemplation are issued in payment of an obligation or merely to guarantee the
said obligation. In accordance with the pertinent rule of statutory construction,
inasmuch as the law has not made any distinction in this regard, no such distinction
can be made by means of interpretation or application. Furthermore, the history of
the enactment of subject statute evinces the definite legislative intent to make the
prohibition all-embracing, without making any exception from the operation thereof in
favor of a guarantee. This intent may be gathered from the statement of the sponsor
of the bill (Cabinet Bill No. 9) which was enacted later into Batas Pambansa Bilang
22, when it was introduced before the Batasan Pambansa, that the bill was
introduced to discourage the issuance of bouncing checks, to prevent checks from
becoming "useless scraps of paper" and to restore respectability to checks, all
without distinction as to the purpose of the issuance of the checks,. The legislative
intent as above said is made all the more clear when it is considered that while the
original text of Cabinet Bill No. 9, supra, had contained a proviso excluding from the
coverage of the law a check issued as a mere guarantee, the final version of the bill
as approved and enacted by the Committee on the Revision of Laws in the Batasan
deleted the abovementioned qualifying proviso deliberately for the purpose of making
 the enforcement of the act more effective (Batasan Record, First Regular Session,
December 4, 1978, Volume II, pp.
1035-1036).

Consequently, what are important are the facts that the accused had deliberately
issued the checks in question to cover accounts and that the checks in question to
cover accounts and that the checks were dishonored upon presentment regardless
of whether or not the accused merely issued the checks as a guarantee. (pp. 4-5,
Dec. IAC) [pp. 37-38, Rollo]. 24

The importance of arresting the proliferation of worthless checks need not be underscored. The
mischief created by unfunded checks in circulation is injurious not only to the payee or holder, but to
the public as well. This harmful practice "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." 25

Petitioner likewise opines that the payee, herein complaining witness, was aware of the fact that his
account with Premiere Development Bank was closed. He claims that the payee’s knowledge verily
supports his contention that he did not intend to put the said check in circulation much less ensure
its payment upon presentment.

Knowledge of the payee of the insufficiency or lack of funds of the drawer with the drawee bank is
immaterial as deceit is not an essential element of an offense penalized by B.P. 22. As already
aforestated, the gravamen of the offense is the issuance of a bad check, hence, malice and intent
26

in the issuance thereof are inconsequential. Moreover, the fact that the check issued is restricted is
likewise of no moment. Cross checks or restricted checks are negotiable instruments within the
coverage of B.P. 22.

Petitioner, on appeal, changed his theory from complete denial that he issued the questioned check
to an admission of its issuance without intent to circulate or negotiate it. Such a change of theory
however, cannot be allowed. When a party adopts a certain theory, and the case is tried and
decided upon that theory in the court below, he will not be permitted to change his theory on appeal
for to permit him to do so would not only be unfair to the other party but it would also be offensive to
the basic rules of fair play, justice and due process. 27

Finally, the issue raised primarily involves a question of fact. Our jurisdiction in cases brought to us
from the Court of Appeals is limited to reviewing the errors of law imputed to the latter, its findings of
fact being conclusive. Therefore, barring any showing that the findings complained of are totally
devoid of support in the record, such findings must stand. After a careful consideration of the
28

records, we sustain the conclusion of the respondent court.

WHEREFORE, premises considered, the instant petition is DISMISSED and the questioned decision
of the respondent court is hereby AFFIRMED en toto. Costs against the petitioner.

SO ORDERED.