Legal Primer on the Bouncing Checks Law

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Bouncing Checks Law (B.P. 22)

“An Act Penalizing the Making or Drawing and Issuance of a Check Without Sufficient Funds or Credit and For Other Purposes”

What acts are penalized under the law?

A. Drawing a Check Without Sufficient Funds (Sec. 1)

  1. A person makes or draws and issues any check
  2. The check is made or drawn and issued to apply on account or for value
  3. The person who makes or draws and issues the check knows at the time of issue that he does not have sufficient funds in or credit with the drawee bank for the payment of such check in full upon its presentment
  4. The check is subsequently dishonored by the drawee bank for insufficiency of funds or credit, or would have been dishonored for the same reason had not the drawer, without valid reason, ordered the bank to stop payment

B. Failing to Keep Sufficient to Cover a Check Issued (Sec. 1, par. 2)

  1. A person has sufficient funds in or credit with the drawee bank when he makes or draws and issues a check
  2. He fails to keep sufficient funds or maintain a credit to cover the full amount of the check if presented within 90 days from the date appearing
  3. The check is dishonored by the drawee bank

What are the essential elements to be liable for violation of B.P. 22?

To be liable for violation of B.P. 22, the following essential elements must be present:

  • The making, drawing, and issuance of any check to apply for account or for value;
  • 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
  • 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.

Who is liable for violating the bouncing checks law?

Any person who makes, draws or issues a worthless check is liable. This includes an “accommodation party,” or one who signed the check without receiving value in exchange or who issues said check for the purpose of lending his name to some other person. The accommodation party is liable even though the holder of the check knew him to be a mere accommodation party who did not receive any value therefor.

When the check is issued in behalf of the corporation or other legal entity, the person whose signature appears on the check is liable.

When is the drawer of the check presumed to know there is insufficient funds in or credit with the drawee bank?

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, when presented within ninety (90) days from the date of the check, shall be prima facie evidence of knowledge of such insufficiency of funds or credit unless such maker or drawer pays the holder thereof the amount due thereon, or makes arrangements for payment in full by the drawee of such check within five (5) banking days after receiving notice that such check has not bee paid by the drawee.

What should the drawee do once the check bounces? (Sec. 3)

It shall be the duty of the drawee of any check, when refusing to pay the same to the holder thereof upon presentment, to cause to be thereon, or attached thereto, the written, printed, or stamped in plane language reason for drawee’s dishonor or refusal to pay the same: Provided, That where there are no insufficient funds in or credit with such drawee bank, such fact shall always be explicitly stated in the notice of dishonor or refusal. In all prosecutions under this Act, the introduction in evidence of any unpaid and dishonored check, having the drawee’s refusal to pay stamped or written therefor or attached thereto, with the reason therefor as aforesaid, shall be prima facie evidence of the making or issuance of said check, and the due presentment to the drawee for payment and the dishonor thereof, and that the same was properly dishonored for the reason written, stamped or attached by the drawee on such dishonored check.

Notwithstanding receipt of an order to stop payment, the drawee shall state in the notice that there were no sufficient funds in or credit with such bank for the payment in full of such check, if such be the fact.

Is a notice of dishonor an indispensable requirement in a prosecution for violation of B.P. 22?

A notice of dishonor is not indispensable as it is not an element of the offense. However, evidence that a notice of dishonor has been sent to and received by the accused is actually sought as a means to prove the second element, such that the absence of sufficient proof of receipt thereof can be fatal in the prosecution’s case. (Jesusa T. Dela Cruz v. People, G.R. No. 163494, August 3, 2016)

Based on Section 2 of B.P. 22, the presumption that the issuer had knowledge of the insufficiency of funds is brought into existence only after it is proved that the issuer had received a notice of dishonor and that within five days from receipt thereof, he failed to pay the amount of the check or to make arrangements for its payment. The presumption or prima facie evidence as provided in this section cannot arise, if such notice of non-payment by the drawee bank is not sent to the maker or drawer, or if there is no proof as to when such notice was received by the drawer, since there would simply be no way of reckoning the crucial 5-day period. (Yu Oh v. CA, 451 Phil. 380 (2003)

This requirement cannot be taken lightly because Section 2 provides for an opportunity for the drawer to effect full payment of the amount appearing on the check, within five banking days from notice of dishonor. The absence of said notice therefore deprives an accused of an opportunity to preclude criminal prosecution. In other words, procedural due process demands that a notice of dishonor be actually served on petitioner. (Yu Oh v. CA, 451 Phil. 380 (2003)

How should a notice of dishonor be served on the drawer?

This may be done personally or by mail. However, note that when the notice of dishonor is served by mail, it is not enough to simply present the letter with a registry receipt or return card as evidence that a notice of dishonor has been served.

What evidence is needed to prove receipt of notice of dishonor?

It is not enough for the prosecution to prove that a notice of dishonor was sent to the petitioner. It is also incumbent upon the prosecution to show “that the drawer of the check received the said notice because the fact of service provided for in the law is reckoned from receipt of such notice of dishonor by the drawee of the check.” (Alferez v. People, et al., 656 Phil. 116 (2011)

Registry return cards must be authenticated to serve as proof of receipt of letters sent through registered mail. Mere presentation of a copy of the demand letter, together with the registry receipt and the return card, allegedly sent to petitioner, when no attempt was made to authenticate or identify the signature on the registry return card, is not enough. Receipts for registered letters and return receipts do not by themselves prove receipt; they must be properly authenticated to serve as proof of receipt of the letter, claimed to be a notice of dishonor. To be sure, the presentation of the registry card with an unauthenticated signature, does not meet the required proof beyond reasonable doubt that petitioner received such notice. (Alferez v. People, et al., 656 Phil. 116 (2011)

If the prosecution failed to authenticate the signature on the return card but the drawer of the check nevertheless made efforts to settle the payment subsequent to the dishonor, is knowledge of the insufficiency of funds in or credit with the drawee nevertheless established?

Yes. In Ma. Rosario P. Campos v. People, et al., G.R. No. 187401, September 17, 2014, the accused maintained that her personal receipt of the notice was not sufficiently established, considering that only a written copy of the letter and the registry return receipt covering it were presented by the prosecution.

The Court, however, considers Campos’ defense that she exerted efforts to reach an amicable settlement with her creditor after the checks which she issued were dishonored by the drawee bank, BPI Family Bank. Campos categorically declared in her petition that, “[she] has in her favor evidence to show that she was in good faith and indeed made arrangements for the payment of her obligations subsequently after the dishonor of the checks.” Clearly, this statement was a confirmation that she actually received the required notice of dishonor from FWCC. The evidence referred to in her statements were receipts dated January 13, 1996, February 29, 1996, April 22, 1998 and May 26, 1998 issued by FWCC to Campos for payments in various amounts ranging from P2,500.00 to P15,700.00. Campos would not have entered into the alleged arrangements beginning January 1996 until May 1998 if she had not received a notice of dishonor from her creditor, and had no knowledge of the insufficiency of her funds with the bank and the dishonor of her checks.

When should a complaint for violation of B.P. 22 be filed?

The criminal complaint for violation of B.P. 22 must be filed within four (4) years from the time the checks have been dishonored.

What is the penalty for violation of B.P. 22?

The penalty for violation of B.P. 22 is imprisonment of at least 30 days but not more than one (1) year, or a fine of at least double the amount of the check but not to exceed PHP 200,000.00. However, under Supreme Court Administrative Circular No. 12-2000, the Supreme Court recommended that fines be imposed instead of a prison sentence for verdicts involving B.P. 22. This was later clarified in Supreme Court Administrative Circular No. 13-2001 that imprisonment is still possible under B.P. 22 verdicts and that if the accused is unable to pay the fine imposed, subsidiary imprisonment may still attach.

One Comment

  1. How much would be the usual acceptance fee of a lawyer who will handle bounced check case? We are the one who will sue the drawer of the check.

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