VACA VS.

CA
(GR 43596, 31 October 1936)
Facts:
Eduardo Vaca is the president and owner of Ervine International while Fernando Nieto, Vacas
son-in-law, is the firms purchasing manager. They issued a check for P10,000 to the General
Agency for Reconnaissance, Detection and Security (GARDS) and drawn against China Bank.
When deposited with PCIBank, the check was dishonored for insufficiency of funds. GARDS
sent a demand letter but the drawers failed to pay within the time given (7 days from
notice). A few days later, however, Vaca issued a check to GARDS for P19,866.16, drawn
against Associated Bank, replacing the dishonored check. GARDS did not return the
dishonored check. Later on, GARDS Acting Operations Manager filed a criminal suit against
Vaca and Nieto for violation of BP 22. The trial court sentenced each to 1 year imprisonment
and to pay a fine of P10,000 and costs.
Issue [1]:
Whether the drawers had knowledge of insufficient funds in issuing the check.
Held [1]: Section 2 of BP 22 provides a presumption of knowledge of insufficiency of funds if
the drawer fails to maintain sufficient funds within 90 days after the date of the check, or to
make arrangement for payment in full by the drawee of such check within 5 days after
receiving notice that such check has not been paid by the drawee. Herein, the second check
supposedly replacing the dishonored check is actually the payment of two separate bills, and
was issued 15 days after notice. Such replacement cannot negate the presumption that
the drawers knew of the insufficiency of funds.
Issue [2]: Whether the absence of damages incurred by the payee absolves the drawers
from liability.
Held [2]: The claim that the case was simply a result of a misunderstanding between
GARDS and the drawers and that the security agency did not suffer any damage from the
dishonor of the check is flimsy. Even if the payee suffered no damage as a result of the
issuance of the bouncing check, the damage to the integrity of the banking system cannot
be denied. Damage to the payee is not an element of the crime punished in BP 22.
Note: In this case, the Court recognized the contribution of Filipino entrepreneurs to the
national economy; and that to serve the ends of criminal justice, instead of the 1 year
imprisonment, a fine of double the amount of the check involved was imposed as penalty.
This was made to redeem valuable human material and prevent unnecessary deprivation of
personal liberty and economic usefulness with due regard to the protection of the social
order.

Negotiable Instruments Law

Case Digest
Glorio Ortega Dumandan, Jr.