BP 22 Bouncing Checks Law

*Checks – a written request or order by a depositor called the “drawer” to a bank, called the
“drawee,” to pay on encashment a person called a “payee,” a certain sum of money.

*Bouncing check – check that has no funds or credit to cover its amount i.e. DAIF (drawn
against insufficient fund check) or NSF (no-sufficient fund check).

*Post dated check – one that is dated after it is issued and delivered

*Reason for enactment – Art. 315, Par 2 d of the RPC does not include in the crime of
estafa the act of issuing a bounced check in payment of pre-existing obligation.

*Purpose of BP 22 – to put a stop to the harmful practice of circulating worthless check

which when multiplied a thousand fold, can very well pollute the channels of trade and hurt
the welfare of society and public interest. (Pp. vs. Lozano)

*Constitutionality – BP 22 is a fundamental exercise by the state of its police power or to

pass laws that will promote health, morals and general welfare of the people. What BP 22
punishes is the issuance of a worthless check and not the non-payment of debt.
- it does not violates the non – impairment clause because checks are not merely
contract but are substitute for money. They form part of the banking system and not entirely
free from the regulatory power of the state.

*Checks covered - present-dated or post- dated, issued to apply on account (to pay a pre-
existing obligation), or for value (given in mutual or simultaneous exchange for something of
value), guarantee, accommodation or deposit checks, memorandum and a foreign checks

 Acts Punished

1. Issuing any check to apply on account or for value, knowing at the time of issue that he
does not have sufficient funds with the d bank for payment of such checks upon
presentment, which check is subsequently dishonored by the bank for insufficiency of funds
or would have been dishonored for the same reason had not the drawer, without any valid
reason, ordered the bank to stop payment.

 Elements
1. A person issues any check.
2. Check is made to apply on account or for value.
3. The person knows at the time of issuance that he does not have sufficient funds with the
bank.
4. The check is subsequently dishonored, or would have been dishonored for the same reason
had not the drawer, without any valid reason, ordered the bank to stop payment.
2. Having sufficient funds with the bank when he issues a check, but failed to keep sufficient
funds to cover the full amount of the check if presented within a period of 90 days from the
date appearing thereon for which reason it is dishonored by the bank.

 Elements
1. The person has sufficient funds in the bank when he issues a check.
2. He fails to keep sufficient funds to cover the full amount of the check if presented within 90
days from the date thereon.
3. The check is dishonored.

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 *Imposable Penalties
1. Imprisonment of not less than 30 days but not exceeding 1 year.
2. Fine of not less than but not more than double the amount of the check, which shall not to
exceed Php 200,000
3. Both imprisonment and fine.

*Circular # 12-2000

- if there is good faith or a clear mistake on the part of the accused and he is a first
time offender or the issuance of the check was the offshoot of a legitimate business
transaction, imposition of fine alone should be considered as the more appropriate penalty.

*Circular #13-2001

- It clarifies that circular # 12-2000 does not remove imprisonment as an alternative

penalty for violations of BP22. It also stated that circular #12-2000 does not remove
imprisonment as an alternative penalty but merely lays down a rule of preference in the
application of the penalties.

*Persons Liable

Personal checks – the signatory or the signatories

Corporate checks – the person or persons who actually signed the bounced check.

 Lina Lim Lao vs. Court of Appeals – the SC underscored the point that being a signatory to
the dishonored corporate checks nearly engenders the prima facie presumption that as
officer of the corporation, the accused who co-signed the check knew of the insufficiency of
funds. It does not, however, make the accused automatically guilty under BP22.

*Rule on Notice of Dishonor

 Corporate checks – Responsibilities under BP22 is personal to the accused so that the
latter’s own knowledge of the dishonor is necessary. Constructive notice to the corporation,
as when the demand was sent to the main and not to its extension office where the accused
was on field duty is not enough to satisfy due process. Notice to the corporation which has a
personality distinct and separate from the officer who issued the check is not tantamount to
notice to the latter. (Lina Lim Lao vs. CA)
 The insufficiency of funds shall be explicitly stated in the dishonor, hence, a mere oral notice
or demand to pay is sufficient for conviction under BP22 (Domagsang vs. CA)
 A signatory to the check who was not informed of the dishonored is not liable.

*OTHER NOTES

 BP 22 complaints are filed before the MTC and McTC and do not need preliminary
investigations. (SC AM No. 00-11-01-sc; Sec 1, par. B(4), Revised Rule on Summary
Procedure)
 The court shall not order the arrest of the accused except for failure to appear whenever
required. (Sec. 16, Revised Rule on Summary Procedure)
 Hold-departure orders shall be only issued within the exclusive jurisdiction of the RTC.
(OCA Circular No. 39-97)
 Doctrine of continuous transaction – if there is a previous transaction between the
accused and the complainant prior to the issuance of the bounced check, deceit is negated
and there can be no estafa, only violations of BP 22.
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 If the complainant parted with his property to the accused not because of any other
consideration but because of the check issued by the accused which later bounced, Estafa
under RPC is committed.

*Valid Defenses against BP 22

 Lack of notice of Dishonor – failure to notify the accused of the dishonor of the
checks will defeat the presumption of knowledge of insufficiency of funds.
 Forgery – a check is forged when the signature appearing thereon was mode
without the authority of the person whose signature appears it. In the case of PNB vs. CA,
the SC decided that the dishonor of a check is a defense when the stop payment requested
by the drawer was due to forgery in the endorsement of a lost check.
 Prescription – termination of the right or power to prosecute or punish the offender
after the lapse of a definite period from the commission of the crime, or if not known, from
the day of its discovery. BP22 prescribes after 4 years beginning from the lapse of 5
banking days from notice of dishonor.
 Duplicity of Offense – a single information charges more than one offense.
Duplicity is a defense in BP 22 if there is also an information for estafa that embodies all the
elements of any of the offenses punishable under BP22.
 Failure to bring the accused for trial within the time limit set by the Speedy
Trial Act and Rules of Criminal Procedure. (Rule 119, Sec 9, Rules of Criminal
Procedure)
 Failure to present the checks for payment within 90 days from the date of
issue.
 Lack of the necessary Signature/s – as to corporate, association or partnership
check wherein particular officers are authorized signatories, proof that not all of such
authorized signatories or less that that required have signed the check is a defense. The
incompleteness or unauthorized drawing of the check did not make the check a valid order
to the bank to pay. As a result, the drawer is not under obligation to deposit or maintain
sufficient funds for its payment.
 Dishonor with a mere stamp in the check “stop payment” – the bank is directed
as well to state in the notice of dishonor even against a “stop payment” that there were no
sufficient funds in or credit with it to pay the check.
 Lack, or illegal consideration in the issuance of the check – the Supreme Court
held in the case of Igos vs. Court of Appeals that malice or intent is immaterial, the offense
being malum prohibitum, “could not be an absolute proposition without desending to
absurdity.” Also in the earlier case of Magno vs. Court of Appeals, the SC will not limit itself
to determining the commission of the prohibited act. It must go one step backward by
ascertaining the nature of the transaction under which the check was issued not only to find
out if the same was drawn for an actual valuable consideration, but also to determine, who,
between the drawer and the payee, is the actual and potential wrong-doer. Hence, if a
check were issued by a kidnap victim to the kidnapper for ransom, it would be unseemly to
hold the drawer liable if the check was dishonored and unpaid.

CASES

*Lozano vs. Martinez- the gravamen of the offense punishable by BP 22 is the act of making
and issuing a worthless check. It is not the non-payment of an obligation which the law
punishes. The law is not intended to coerce a debtor to pay his debt.
-the freedom of contract which is constitutionally protected is freedom to enter into
lawful contracts. Contract which contravenes public policy are not lawful. Checks cannot be

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categorized as mere contracts. It is a commercial instrument which forms part of the
banking system and therefore not entirely free from the regulatory power of the state.

*Vaca vs. Court of Appeals- refer to circular # 12-2000 and circular #13-2001

*Lim vs. Court of Appeals- there are certain crime in which some acts material and essential
to the crimes and requisite to the consummation occurs in one place and some in another.
These are the so-called transitory or continuing crime under which the violation of BP 22 is
categorized.

*Vallarta vs. Court of Appeals- if the sale of jewelry, for instance, was on sale on approval,
ownership posses to the buyer upon its delivery. A check issued simultaneously with the
delivery of the jewelry is not deemed as payment of a pre-existing obligation but issued for
value. Complainant parted with the jewelry to the accused not because she is rich but
because of the check issued by the accused which later bounced. Estafa under RPC is
committed.

BP 22 ESTAFA

 Crime against public interest  Crime against property

 Mere issuance of a bounced check  Deceit is essential, also damage
 Failure of the drawer to settle the  Failure of the drawer to settle the
amount within 5 banking days is account within 3 days is conclusive
conclusive evidence of knowledge evidence of deceit
of insufficient funds  Rules of Criminal Procedure
 Rules on summary procedure  RTC
 MTC, MCTC  Mala in se
 Malum prohibitum
 It covers post-dated, present dated  It only covers post-dated checks and
checks, check issued to apply on checks issued for value or given in
account (to pay a pre-existing mutual or simultaneous exchange for
obligation), or for value. something of value.

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