CASE TITLE: Ben Rico v.

People of the Philippines AUTHOR: Sumanga

G.R. No.: NOTES:
TOPIC: Notice of Dishonor;
PONENTE: Quisumbing, J.
CASE LAW/ DOCTRINE:
Sec. 89. To whom notice of dishonor must be given. Except as herein otherwise provided, when a negotiable instrument has been dishonored by non-
acceptance or non-payment, notice of dishonor must be given to the drawer and to each indorser, and any drawer or indorser to whom such notice is not
given is discharged.

In King v. People, The prima facie presumption arises when a check is issued. But the law also provides that the presumption does not arise when the issuer
pays the amount of the check or makes arrangement for its payment within five banking days after receiving notice that such check has not been paid by the
drawee.

FACTS:
Ben Rico was a pakyaw contractor who used to purchase construction materials on credit from private complainant Ever Lucky Commercial (ELC),
represented by Victor Chan, Manager
Petitioner made payments either in cash or by postdated checks.
On several occasions, he issued checks to ELC, which were dishonored by the bank upon presentment for payment for insufficiency of funds or closed
account.
ELC demanded payments from petitioner, who failed to make good his undertaking to replace the checks.
No formal letter of demand or notice of dishonor was sent to Rico.
It was also established by the prosecution that ELC, through its manager, issued several receipts covering several payments in various amounts made
by petitioner as replacement of some dishonored but returned checks as well as for payment of materials purchased.
No official receipts covering the materials purchased, however, were presented in court as evidence
Ever Lucky eventually sued Rico for violation of Batas Pambansa 22.
ISSUE:
Whether or not Rico is guilty of violating BP 22
HELD:
No.
RATIO:
The law enumerates the elements of violation of B.P. 22, namely (1) the making, drawing and issuance of any check to apply for account or for value;
(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
or dishonor for the same reason had not the drawer, without any valid cause, ordered the bank to stop payment.
The prosecution only proved elements one and two in the case at bar. But it failed to prove that Rico has knowledge of the insufficiency of funds in the
drawee bank when the checks were presented for payment.
Under the law, there shall be a prima facie evidence of knowledge of insufficiency on the part of the accused by making, drawing and issuance of a check
payment of which is refused by the drawee because of insufficient funds or credit with such bank, when presented within ninety (90) days from the
 date of the check. However, this prima facie presumption shall not arise if within 5 days from receiving the notice of dishonor, the accused shall have
paid or made arrangement to pay in full.
In the case at bar, no notice of dishonor was sent to Rico hence the presumption did not arise. And so since the presumption did not arise, it was up to
the prosecution to prove Ricos knowledge of insufficiency which it failed to do.
DISSENTING/CONCURRING OPINION(S):