BOUNCING CHECKS LAW

(BP 22, April 3, 1979)

Acts punished:

1. Any person who makes or draws and issues any check to apply for an account or for value
knowing 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, which 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 any valid reason, ordered the bank to
stop payment.

2. Any person who, having sufficient funds in or credit with the drawee bank when he makes or
draws and issues a check, shall fail to keep sufficient funds or to maintain a credit 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 drawee bank.

Where a check is drawn by a corporation, company or entity, the person(s) who actually signed
the check in behalf of such drawer shall be liable under this Act. (Sec. 1)

The making, drawing and issuance of a check payment of which is refused by the drawee
bank, when presented within 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 arrangement for payment in full
by the drawee of such check within 5 banking days after receiving notice that such check
has not been paid by the drawee. (Sec. 2)

The absence of a notice of dishonor necessarily deprives the accused an opportunity to preclude
a criminal prosecution.  Accordingly, procedural due process clearly enjoins that a notice of
dishonor be actually served on petitioner.  In order to create the prima facie presumption that the
issuer knew of the insufficiency of funds, it must be shown that he or she received a notice of
dishonor and, within 5 banking days thereafter, failed to satisfy the amount of the check or make
arrangement for its payment. (King v. People, 131540, Dec. 2, 1999)

Prosecution under this Act shall be without prejudice to any liability for violation of any
provision of the RPC. (Sec. 5) (Q10, 1992 Bar)

Under this statute what is punished is the mere issuance of a check without sufficient funds. 
Damage is not an element.  A person who, in bad faith, negotiates a check issued by another
knowing it was not covered by sufficient funds in payment of an obligation is liable for estafa.
(People v. Isleta, 61 Phil. 332)

Under BP 22, the offense therein punished is not committed:

1. The bouncing check is presented for payment after 90 days from date of issue.
2. If presented within 90 days, the drawer within 5 banking days from notice paid the payee or
holder of the check its amount.

The essential element of the law is knowledge on the part of the maker or drawer of the check of
the insufficiency of his funds.  Malice and intent in issuing the worthless check are immaterial;
the offense being malum prohibitum. (Que v. People, 73217, Sept. 21, 1987)  The gravamen of
the offense is the issuance of a bad check, not the non-payment of an obligation. (Lozano v. Hon.
Martinez, 146 SCRA 325)  The maker’s knowledge of insufficiency of his funds is legally
presumed from the dishonor of the check for lack of funds. (People v. Lagui, 171 SCRA 305)
(Q16, 1991 Bar)

Each act of drawing and issuing a bouncing check constitutes a violation of BP 22 because in a
statutory offense or malum prohibitum malice or criminal intent is immaterial.  If the drawer has
a valid reason for stopping payment, he cannot be held liable under BP 22.

Memorandum check is an ordinary check with the word “Memorandum”, “Memo,” or “Mem”
written across the face, signifying that the maker or drawer engages to pay its holder absolutely
thus partaking the nature of a promissory note.  A memorandum check upon presentment is
generally accepted by the bank.  A person who issued a memorandum check without sufficient
funds is guilty of violating BP 22 as said law covers all check whether it is an evidence of
indebtedness, or in payment of a pre-existing obligation, or as deposit or guarantee. (People v.
Nitafan, 215 SCRA 79) (Q4, 1995 Bar; Q1, 1994 Bar)