Anti-Bouncing Check

Law (B.P. BLG. 22)

Atty. Coco Chanel G. Garcia
OVERVIEW

 This law penalizes a person who issues a worthless check on account or for
value regardless of the reason of issuance.
WHAT IS A CHECK?

 A check is a bill of exchange drawn on a bank payable on demand. –Sec. 185

Negotiable Instruments Law
 A check is a written request or order by a depositor called the “drawer” to a
bank, called the “drawee”, to pay on encashment a person called the
“payee” a certain sum of money.
WHEN DO CHECKS BECOME STALE?

 A check must be presented for payment within a reasonable time after its
issue or the drawer will be discharged from liability thereon to the extent of
the loss caused by the delay. –Sec. 186, Negotiable Instruments Law
 Based on the current bank practices, a check becomes stale six (6) months
after the date appearing on the check. When a check becomes stale, it
cannot anymore be cashed with the drawee bank. The proper remedy here is
to request the drawer of the check to issue a new one.
ARE STALE CHECKS BOUNCING CHECKS

 No. Stale checks are not bouncing checks.

 Stale checks cannot be cashed due to the PAYEE’s negligence in not presenting
it to the bank for encashment within a reasonable time. Bouncing checks
cannot be cashed because the DRAWER’s account to be charged has
insufficient funds or is closed and said DRAWER had knowledge of such
insufficiency.
WHAT IS A BOUNCING CHECK?

 A bouncing check is a check that “bounces” from the drawee bank and back
to the drawer of said check. A bouncing check is oftentimes referred to as a
rubber check because rubber has properties that allows it to bounce.
 A check “bounces” either because there is not enough money or credit in a
bank to cover its amount, as in DAIF (drawn against insufficient funds check)
and NSF (non-sufficient funds check). A check bounces also for the simple
reason that the same was drawn against a closed account.
WHAT CRIMES CAN YOU COMMIT BY
ISSUING A BOUNCING CHECK?
 Violation of Sec. 1 of B.P. 22; and
 Estafa under Art. 315 (2)(d) of the Revised Penal Code
HOW DO YOU VIOLATE SEC. 1 OF B.P. 22?

 By making/drawing and issuing any check to apply on account or for value,

knowing at the time of issue that one does not have sufficient funds in or
credit with the drawee bank for the payment of such check in full upon its
presentment, and said 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.
 By making/drawing and issuing a check while having sufficient funds in or
credit with the drawee bank, but failing to keep sufficient funds or to
maintain a credit to cover the full amount of the check if presented within a
period of ninety (90) days from the date appearing thereon, for which reason
it is dishonored by the drawee bank.
VIOLATION OF B.P. 22

 By making/drawing and issuing a check knowing that you have insufficient

funds and said check was dishonored.
 By making/drawing and issuing a check while having sufficient funds, but
failing to maintain said funds within ninety (90) days from the date of the
check, and said check was dishonored.
ELEMENTS OF THE OFFENSE

 Making or drawing and ISSUING A CHECK to apply on account or for value;

 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;
 Subsequent DISHONOR of the check by the drawee bank for insufficiency of funds
or credit, or dishonor of the check for the same reason had not the drawer,
without any valid cause, ordered the bank to stop payment.

Note: The elements enumerated here pertains to the first way of

violating B.P. 22. As to the second way of violating B.P. 22, the
maker/drawer or issuer of the check must have knowledge of
insufficiency of funds with the drawee bank at any time within
ninety (90) days from the date appearing on the check.
NOTICE OF DISHONOR

 A notice of dishonor is a notice given to the drawer informing him/her that

the check he/she issued was dishonored by the drawee bank, the reason
behind such dishonor, and that he/she has five (5) days to make good on the
check.
 A notice of dishonor must be made in writing. An oral notice is not enough.
 A notice of dishonor can be made by the drawee bank or the payee or both.
 A notice of dishonor must be received by the drawer.
 Absence of a written notice of dishonor received by the drawer is fatal to the
case of violation of B.P. 22 against said drawer.
Case no. 1

John decided to write a check payable to “CASH” in the amount of P10,000.00

and left the same on his desk. Keith saw the check on John’s table and took it.
Since the check was payable to “CASH”, the holder of such check can cash the
same. Keith then went to the bank to have it cashed. The bank dishonors the
check because John’s bank account only contained P5,000.00. The bank also
notified John in writing of the dishonor. One (1) month after John’s receipt of the
notice of dishonor, Keith filed a criminal case of violation of B.P. 22 against John.

Assuming that the check is not a post-dated check, will John be criminally liable
for violation of B.P. 22?
Case no. 2

Suppose John gave the check to Keith for safekeeping, and Keith instead tried to
cash it.

Assuming the check is not a post-dated check and proper notice of dishonor was
given to John, will John be criminally liable for violating B.P. 22 if Keith files a
criminal case against him one month after John’s receipt of the notice of
dishonor?
Case no. 3

Suppose John gave the check to Keith in payment for the former’s debt of
P10,000.00 to the latter.

Assuming the check is not a post-dated check and proper notice of dishonor was
given to John, will John be criminally liable for violating B.P. 22 if Keith files a
criminal case against him one month after John’s receipt of the notice of
dishonor?
PRESUMPTION OF KNOWLEDGE

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 been paid by the drawee. –Sec. 2, Anti-
Bouncing Check Law
REMEDY OF DRAWER UPON RECEIPT OF
NOTICE OF DISHONOR
Under Sec. 2 of the Anti-Bouncing Check Law, the maker/drawer is given five (5)
banking days to settle his account by performing either of the following:
 By paying the payee/holder the amount due in the check; or
 By depositing sufficient funds to his account with the drawee bank or making
arrangements for payment in full by said drawee bank.

If the maker/drawer fails to settle his account within five (5)

banking days, he shall be presumed to have knowledge of the
insufficiency of funds; provided, that the payee/holder presented
the check for payment with the drawee bank within ninety (90)
days from the date appearing in said check.
DUTY OF DRAWEE BANK

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 written, printed, or
stamped in plain language thereon, or attached thereto, the reason for drawee’s
dishonor or refusal to pay the same: Provided, that where there are no sufficient
funds in or credit with such drawee bank, such fact shall always be explicitly
stated in the notice of dishonor or refusal. –Sec. 3, Anti-Bouncing Check Law
WHAT IS CREDIT?

The word “credit” as used herein shall be construed to mean an arrangement or

understanding with the bank for the payment of such check. –Sec. 4, Anti-
Bouncing Check Law
PENALTIES

 Imprisonment of not less than 30 days but not more than 1 year; or
 A fine of not less than but not more than double the amount of the check, but
shall in no case exceed P200,000.00; or
 Both imprisonment and fine.
IMPRISONMENT? FINE? BOTH?

 Supreme Court A.C. 12- 2000 mandates that as much as possible, under
applicable circumstances, only the fine shall be imposed as penalty.
 However, the same circular did not remove the penalty of imprisonment. It
only urged judges to impose the lesser penalty to best serve the ends of
criminal justice.
 If it can be shown that the worthless check was issued for fraudulent
purposes, the judge may impose the penalty of imprisonment.
MULTIPLE CONVICTIONS

 Each issuance of a worthless check shall count as one violation of B.P. 22,
hence it is possible to exceed the 1-year maximum imprisonment or the
P200,000.00 maximum fine if several worthless checks were issued.
DEFENSES

 NO WRITTEN NOTICE OF DISHONOR.

 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 discovery thereof. In B.P. 22 cases, the prescription sets four (4)
years after expiration of the five (5) banking days from notice of dishonor.
 DUPLICITY OF OFFENSES. A single information charges more than one offense.
 FORGERY. A check is forged when the signature appearing on the check was
made without the authority of the person whose signature appears on it.
DEFENSES

 LACK OF NECESSARY SIGNATURE(S) ON THE CHECK.

 DUE PAYMENT OR PERFORMANCE OF THE OBLIGATION.
 FAILURE TO PRESENT THE CHECK FOR PAYMENT WITHIN NINETY (90) DAYS FROM
THE DATE APPEARING ON THE CHECK.
 DISHONOR WITH A MERE STAMP ON THE CHECK “STOP PAYMENT.” Banks are
required to state the reason of the stop payment order. If the reason for the
stop payment order was due to insufficient funds, the drawer of the check
may be held liable for violating B.P. 22.
ARE FOREIGN CHECKS COVERED BY
B.P.22?
 A foreign check is a check drawn against a foreign bank. Normally, a special
law like B.P. 22 will have no extraterritorial application. All the same, in the
case of Que v. People and IAC, supra, it was decided that a bounced foreign
check falls within the criminal contemplation of B.P. 22. Foreign checks,
provided either they are drawn and issued in the Philippines, though payable
outside, are within the coverage of the law.
ESTAFA UNDER ART. 315(2)(D) OF THE
REVISED PENAL CODE
 Estafa under Art. 315(2)(D) of the Revised Penal Code is committed by post-
dating a check, or issuing a check in payment of an obligation when the
amount in the offender’s bank account is 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.
ESTAFA UNDER ART. 315(2)(D) OF THE
REVISED PENAL CODE
 The worthless check must be issued by the drawer simultaneous with or prior
to the performance of the obligation of the payee. This presupposes that the
payee performs his obligation to the drawer under assumption that the issued
check is not worthless. Thus what is being punished is the deceit caused by
the drawer in issuing a worthless check. If the check was issued to pay the
drawer’s pre-existing obligation to the payee, there is no estafa committed.
Case no. 4

Ted engaged the content creation services of Kris. They both agreed that Ted will
pay P7,500.00 to Kris after the latter rendered her services.

After performing her obligation to Ted, Kris demanded payment. Ted explained
that due to lack of funds, he will pay Kris next week. One week later, instead of
paying in cash, Ted issued to Kris a check worth P7,500.00. When Kris tried to
cash it, the bank dishonors the check due to insufficient balance in Ted’s
account.

If notice of dishonor was properly given and Ted was given time to make good on
the check to no avail, may he now be liable with estafa or violation of B.P. 22?
CAN A PERSON BE HELD LIABLE FOR
VIOLATION OF B.P. 22 AND ESTAFA AT THE
SAME TIME?
 Yes. Sec. 5 of the Anti-Bouncing Check Law states that prosecution under the
said law shall be without prejudice to any liability for violation of any
provision of the Revised Penal Code.