For review on certiorari are: (1) the order of the City Court of Cagayan de Oro dated January 6, 1977 which granted the motion to quash the information for estafa filed against the accused in Criminal Case No. 33867, "People of the Philippines vs. Ranulfo Salazar" (L-45490); (2) the decision of the Court of Appeals in case CA-G.R. No. 16195-Cr, "People of the Philippines vs. Tan Tao Liap" (L-45711) which affirmed the decision of the City Court of Pasay City convicting the accused of the crime of estafa, and (3) the order of the Court of First Instance of Davao City in Criminal Case No. 2023, entitled "People of the Philippines vs. Daylinda Lagua" (L-42971) dated December 23, 1975 which denied petitioner's motion to quash. These cases are jointly considered in view of the similarity of the issue involved and which is whether or not the issuance of a postdated check, which is subsequently dishonored for insufficiency of funds, in payment of a pre-existing obligation constitutes estafa as defined and penalized under Article 315, par. 2(d) of the Revised Penal Code as amended by Republic Act No. 4885 and Presidential Decree No. 818.

G.R. No. L-45490:

The circumstances leading to this case are brief and undisputed. On May 29, 1975, the complainants, Ramon Yap and Tommy Pacana, leased to the accused, Ranulfo Salazar, the "Tanguili Night Club" situated in Cagayan de Oro City, for the monthly rental of P2,000.00. On May 23, 1976, Ranulfo Salazar paid P500.00 in cash and P1,500.00 in check (PBC Check No. C179-4555 postdated May 31, 1976) to Ramon Yap for the rental of the premises corresponding to the period from April 15 to May 15, 1976. However, when the check was presented to the bank for payment, the same was dishonored for lack of funds to cover the same. For failure of Ranulfo Salazar to make good his obligation, complainants instituted a suit for estafa against him, and on June 10, 1976, the First Assistant City Fiscal of Cagayan de Oro City filed with the City Court of Cagayan de Oro (for preliminary investigation) the following information:

 

"That on or about May 23, 1976, in Cagayan de Oro City, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, by means of false pretenses or fraudulent acts executed prior to or simultaneously with the commission of the fraud, with intent to defraud and knowing that he had no money to pay, did then and there wilfully, unlawfully and feloniously issue a Philippine Banking Corporation Check No. C179 for P1,500.00 in favor of Ramon Yap dated May 31, 1976, in payment of and/or representing accused monthly rental of the Tanguili Night Club for April 15, 1976 to May 15, 1976, knowing fully well that said accused had no funds in the bank or the funds deposited by him is not sufficient to cover the amount of said check as evidence by the fact that when said check was presented for encashment, it bounces or was dishonored for reason that there is no funds available and despite demands made, accused failed and refused and still fails and refuses to make good or pay the same, to the damage and prejudice of the offended party in the aforementioned sum of P1,500.00, Philippine Currency."^[1] 

On August 6, 1976, Ranulfo Salazar filed a motion to quash the information alleging:

 

"1. That the facts charged do not constitute an offense; and

 

"2. That the accused is not the drawer or the person who issued PBC Check No. C179-4555 in the amount of P1,500.00 subject matter of this litigation in favor of the complainant."^[2] 

An opposition to the said motion to quash was filed by the prosecution and after the parties were heard in oral argument, the City Court issued an order dated January 6, 1977 granting the motion to quash by ruling that since the check was issued in payment of a pre-existing obligation, no estafa was committed. Petitioner now seeks the nullity of said order on the ground that the same is not in accord with law, being an erroneous interpretation of the provision of Article 315, paragraph 2(d) of the Revised Penal Code and of Rule 112 of the Rules of Court.

G.R. No. L-45711:

The record shows that the petitioner Tan Tao Liap and the complainant were old friends. On several occasions from January to July, 1972, Tan Tao Liap borrowed money from Ngo Cheng which amounted to P9,000.00. It was only in the early part of August, 1972 that Ngo Cheng demanded from Tan Tao Liap the payment of his indebtedness plus the sum of P500.00 as interest.^[3]  Tan Tao Liap informed Ngo Cheng that he did not have sufficient funds to pay but that he might possibly be able to settle the debt about the end of the month as he was then expecting to receive some money at that time. Tan Tao Liap further proposed to pay the loan on a staggered basis and Ngo Cheng agreed to this proposal on the condition, however, that Tan Tao Liap would issue him three (3) checks, namely: (1) Check No. 7-442560 dated August 24, 1972 for P3,000.00; (2) Check No. 7442561 dated August 31, 1972 for P3,000.00 and (3) Check No. 7442562 dated September 1, 1972, for P3,500.00, all drawn against his account with the Consolidated Bank and Trust Company at Soler St., Manila.^[4]  The first check was deposited by Ngo Cheng with the Associated Bank at Pasay City and it was duly paid and cleared by the Consolidated Bank as Tan Tao Liap was able to deposit sufficient funds to cover the same.^[5]  Subsequently, however, Tan Tao Liap suffered business reverses and so what he did was to inform Ngo Cheng not to deposit the second and third checks which were to mature on August 31, 1972 and September 1, 1972, respectively, because of his inability to raise the amounts to cover said checks. As an alternative, Tan Tao Liap proposed to pay the balance in monthly installments of P300.00 until such time that he could raise enough funds. Ngo Cheng, however, turned down the offer and even told Tan Tao Liap that he was going to file a criminal case against him if he failed to deposit the amount for the two remaining checks.^[6]  At the instance of Ngo Cheng, Tan Tao Liap was charged by the City Fiscal of Pasay City with the crime of estafa on January 24, 1973 for issuing the third check (No. 7-442562, dated September 1, 1972, for P3,500.00) which was dishonored for lack of funds.

On November 9, 1973, the City Court rendered its decision convicting Tan Tao Liap of the crime of estafa despite its finding that the check was issued in payment of a pre-existing obligation.^[7]  Subsequently, Tan Tao Liap appealed the said decision to the Court of Appeals. However, on October 26, 1976, the Court of Appeals rendered judgment affirming that of the City Court of Pasay City. Not satisfied with the decision of the Court of Appeals, Tan Tao Liap now seeks a review thereof by this Court alleging that:

 

"THE COURT OF APPEALS ERRED IN CONSTRUING ARTICLE 315 OF THE REVISED PENAL CODE AS HOLDING PETITIONER LIABLE FOR ESTAFA FOR HAVING ISSUED A BAD CHECK EVEN IF THE CHECK HAD BEEN ISSUED IN PAYMENT OF A PRE-EXISTING DEBT."

G.R. No. L-42971:

The petitioner, Daylinda A. Lagua, is engaged in the logging business in Davao City under the business name "Manuel P. Lagua Logging Enterprises". Since October of 1973, the Lagua Enterprises had been buying their logging supplies and hardware on credit from the Gempesaw Hardware in Davao City, managed by Marcos Chua. The items delivered on credit to the Lagua Enterprises by the Gempesaw Hardware for the period from October, 1973 to June 20, 1974 amounted to P28,601.54. Demands were made for its payment and sometime in July, 1974, Daylinda Lagua issued Equitable Banking Corporation Check No. 22711219A, in the amount of P30,000.00, payable to Marcos Chua and postdated August 24, 1974, the difference in the amount being the accrued interests on the amount of P28,601.54, in payment of the obligation. Upon presentment after its due date, the said check was dishonored by the drawee bank for insufficient funds. Accordingly, a letter was sent to Daylinda Lagua demanding payment therefor, but she failed to pay. Consequently, an information was filed before the Court of First Instance of Davao City charging her with estafa, defined and penalized under Article 315, par. 2(d) of the Revised Penal Code, as amended by Republic Act No. 4885, committed as follows:

 

"That on or about August 24, 1974, in the City of Davao, Philippines, and within the jurisdiction of this Honorable Court, the above-mentioned accused, well knowing that she did not have sufficient funds in the bank, did then and there wilfully, unlawfully and feloniously and with intent to gain issue and made out an Equitable Banking Corporation Check No. 22711219A dated August 24, 1974 in the amount of P30,000.00 in payment of an obligation from the Gempesaw Hardware owned by Marcos Chua; that upon pre-sentation of the above-mentioned check to the bank for encashment, the same was dishonored for insufficiency of funds and despite repeated demands made upon said accused to make good the above-mentioned check, the same refused and failed to make payment, to the damage and prejudice of the said Gempesaw Hardware owned by Marcos Chua in the aforementioned amount of P30,000.00."^[8] 

The case was docketed in the Court of First Instance of Davao City as Criminal Case No. 2023.

Upon arraignment, Daylinda Lagua pleaded not guilty. Thereafter, trial proceeded and the prosecution adduced its evidence, after which the accused filed a motion to dismiss the case,^[9]  claiming that upon the facts adduced in the case, it would appear that the postdated check was issued in payment of a pre-existing obligation and, therefore, no estafa was committed according to the rule enunciated in the cases of People vs. Lilius^[10] and People vs. Fortuno.^[11]

The prosecution opposed the motion alleging that the rule stated in the Lilius  case had been superseded by Republic Act No. 4885, so that the crime of estafa is committed upon the issuance of a postdated check, subsequently dishonored, whether the issuance be in payment of a pre-existing obligation, or for an obligation contracted at the time the check was issued, when the issuance is attended by deceit constituting false pretense or fraudulent act.^[12]

The motion to dismiss the case was denied on December 23, 1975,^[13] and the motion for its reconsideration^[14] was also denied on February 2, 1976.^[15] Whereupon, Daylinda Lagua instituted the present petition.

As stated, the issue for determination is whether or not the issuance of a postdated check, which is subsequently dishonored for insufficiency of funds, in payment of a pre-existing obligation, constitutes estafa as defined and penalized under Article 315, par. 2(d) of the Revised Penal Code, as amended by Republic Act No. 4885 and Presidential Decree No. 818.

Prior to its amendment, Article 315, par. 2(d) of the Revised Penal Code, read:

 

"Art. 315. Swindling (estafa).- Any person who shall defraud another by any of the means mentioned hereinbelow shall be punished by:

 

xxx xxx xxx

 

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

 

xxx xxx xxx

 

"(d) By postdating a check, or issuing a check in payment of an obligation the offender knowing that at the time he had no funds in the bank, or the funds deposited by him were not sufficient to cover the amount of the check, and without informing the payee of such circumstances."

Under said provisions, it was the rule that the mere issuance of a check with knowledge on the part of the drawer that he had no funds to cover its amount and without informing the payee of such circumstances, does not constitute the crime of estafa if the check was intended as payment of a pre-existing obligation. The reason for the rule is that deceit, to constitute estafa, should be the efficient cause of the defraudation and as such should either be prior to, or simultaneous with the act of fraud.^[16]

In 1967, the law was amended by Republic Act No. 4885, eliminating the phrases "the offender knowing that at the time he had no funds in the bank" and "and without informing the payee of such circumstances." However, a presumption was included. The pertinent provisions of the law, as amended, now reads:

 

"Art. 315. Swindling (estafa).- Any person who shall defraud another by any of the means mentioned hereinbelow shall be punished by:

 

xxx xxx xxx

 

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

 

xxx xxx xxx

 

"(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."

A comparative analysis of the two provisions will readily show that what has been established under the amendment is the prima facie  evidence of deceit constituting false pretense or fraudulent act in case the drawer fails to deposit the necessary amount within three (3) days from notice of dishonor from the bank and/or payee or holder of the check. Likewise, the amendment has eliminated the requirement under the previous provision for the drawer to inform the payee that he had no funds in the bank or the funds deposited by him were not sufficient to cover the amount of the check.^[17]  Moreover, what is significant to note is that the time or occasion for the commission of the false pretense or fraudulent act has not at all been changed by the amendment. The false pretense or fraudulent act must be executed prior to or simultaneously with the commission of the fraud. Thus, under 315, paragraph 2(d) of the Revised Penal Code, as amended by Republic Act No. 4885, the following are the elements of estafa: (1) post dating or issuance of a check in payment of an obligation contracted at the time the check was issued; (2) lack or insufficiency of funds to cover the check; and (3) damage to the payee thereof. Now, it is asked: Is there deceit and damage when a bad check is issued in payment of a pre-existing obligation? It is clear that under the law, the false pretense or fraudulent act must be executed prior to or simultaneously with the commission of the fraud. To defraud is to deprive some right, interest, or property by deceitful device.^[18]  In the issuance of a check as payment for a pre-existing debt, the drawer derives no material benefit in return as its consideration had long been delivered to him before the check was issued. In short, the issuance of the check was not a means to obtain a valuable consideration from the payee. Deceit, to constitute estafa should be the efficient cause of the defraudation.^[19] Since an obligation has already been contracted, it cannot be said that the payee parted with his property or that the drawer has obtained something of value as a result of the postdating or issuance of the bad check in payment of a pre-existing obligation.^[20]

Finally, considering the absence of an express provision in the law, the postdating or issuance of a bad check in payment of a pre-existing obligation cannot be penalized as estafa by means of deceit, otherwise, the legislature could have easily worded the amendatory act to that effect. Since the language of the law is plain and unambiguous, We find no justification in entering into further inquiries for the purpose of ascertaining the legislative intent.^[21] Moreover, laws that impose criminal liability are strictly construed.^[22] The rule, therefore, that the issuance of a bouncing check in payment of a pre-existing obligation does not constitute estafa has not at all been altered by the amendatory act.^[23]

The issue of jurisdiction was also raised by the petitioner in the case of People vs. Sabio, G.R. No. L-45490. It is contended that the City Court, acting pursuant to its authority to conduct preliminary investigations, cannot dismiss the case as a motion to quash can only be availed of in a regular trial where the court has jurisdiction to try the offense. It is further alleged that the purpose of a preliminary investigation is merely to determine a probable cause and not to rule on difficult questions of law. We see no merit in these contentions. There is no dispute that the information was filed before the City Court for purposes of preliminary investigation only, as the offense falls under the exclusive jurisdiction of the Court of First Instance. The check involved amounts to P1,500.00, hence, the imposable penalty for the offense is prision mayor in its medium period or an imprisonment ranging from eight (8) years and one (1) day to ten (10) years.^[24] Under Section 78 of Republic Act No. 521, as amended by Republic Act No. 3969, the City Court of Cagayan de Oro City is authorized to conduct preliminary investigation.^[25]  When a power is conferred upon a court or judicial officer, it is deemed that all the means necessary to carry it into effect are included therein.^[26] The power, therefore, conferred upon the City Court of Cagayan de Oro City to conduct preliminary investigations carries with it the power to draw a conclusion after the investigation. It has been held that in the preliminary investigation proper, the Justice of the Peace may discharge the defendant if he finds no probable cause to hold the defendant for trial. But if he finds a probable cause, it is his duty to bind over the defendant to the Court of First Instance for trial on the merits.^[27]  Moreover, the purpose of a preliminary investigation is to secure the innocent against hasty, malicious and oppressive prosecutions, and to protect him from open and public accusation of a crime.^[28] The City Court, therefore, acted within its jurisdiction in granting the motion to quash the information filed in this case.

WHEREFORE, in view of all the foregoing, judgment is hereby rendered:

1. Dismissing the petition in case G.R. No. L-45490 for lack of merit;

2. Reversing the decision of the Court of Appeals in case G.R. No. L-45711, and acquitting the petitioner of the crime charged; and

3. Dismissing Criminal Case No. 2023, entitled "People vs. Daylinda Lagua".

No pronouncement as to costs.

SO ORDERED.

Castro, C.J., Teehankee, Muñoz Palma, Aquino, Santos, Fernandez, and Guerrero, JJ., concur.

Fernando, J., concurs in L-45711 and L-42971 (Criminal Case No. 2023) but dissents in L-45490 as explained in a separate opinion.

Barredo, J., concurs and dissents in a separate opinion.

Makasiar, J., joins Justice Barredo in a concurring and dissenting opinion with Justice Antonio in his dissent.

Antonio, J., dissents in separate opinion re-construction of Art. 315, 29d of the Rev. Penal Code as amended.

---

^[1] p. 4, rollo of L-45490.

^[2] p. 19, ibid.

^[3] pp. 5-7, tsn. of September 7, 1973.

^[4] pp. 7-8, Id.

^[5] p. 13, Id.

^[6] p. 14, Id.

^[7] Decision of the City Court of Pasay City.

^[8] Annex "E", p. 43, rollo of L-42971.

^[9] Annex "C", p. 17, Id.

^[10] 59 Phil. 339.

^[11] 73 Phil. 407.

^[12] Annex "F", p. 45, Id.

^[13] Annex "A", pp. 14, Id.

^[14] Annex "D", p. 31, Id.

^[15] Annex "B", p. 15, Id.

^[16] People vs. Lilius, supra; People vs. Fortuno, supra.

^[17] Congressional Record, Senate, Vol. II, No. 37, March 20, 1967, 931-937.

^[18] People vs. Quesada, 60 Phil. 515.

^[19] People vs. Fortuno, supra.

^[20] People vs. Lilius, supra.

^[21] Velasco vs. Lopez, 1 Phil. 720.

^[22] People vs. Manantan, 115 Phil. 657; Neidlinger vs. State, 88 S.E. 687; Crawford, The Constitution of Statutes, 460.

^[23] "The amendment does not seem to have revoked the rule that issuing a bad check in payment of a pre-existing obligation does not constitute estafa under par. 2(d)." (Aquino, The Revised Penal Code, Vol. VIII, 1977 ed., 1611)

^[24] Art. 315, Revised Penal Code, as amended by Presidential Decree No. 818, dated October 22, 1975.

^[25] "Section 78. Jurisdiction of the City Court.- The City Court shall have like jurisdiction in civil and cri-minal cases and the same incidental powers as are at present conferred by law upon jurisdiction of the municipal courts of capital of provinces and city courts of chartered cities. It may also conduct preliminary investigation for any offense, without regard to the limits of punishment, and may release, or commit and bind over any person charged with such offense to secure his appearance before the proper court." (Underscoring supplied)

^[26] Biron vs. Cea, 73 Phil. 673.

^[27] Ngo Hoc vs. Aquino, 72 Phil. 90; U.S. vs. Banzuela, 31 Phil. 564; Biron vs. Cea, supra.

^[28] People vs. Monton, G.R. No. L-33906, May 23, 1968.

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