ReSA - THE REVIEW SCHOOL OF ACCOUNTANCY

CPA Review Batch 45  May 2023 CPA Licensure Examination

RFBT-17
REGULATORY FRAMEWORK for BUSINESS TRANSACTIONS J. DOMINGO  N. SORIANO

ANTI-BOUNCING CHECKS LAW

ELEMENTS OF VIOLATION of Bouncing Checks Law (BP 22):
1. The making, drawing, and issuance of any check to apply for account or for value;
2. 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
3. (a) The subsequent dishonor of the check by the drawee bank for insufficiency of funds or credit or (b) would have been
dishonored for the same reason had not the drawer, without any valid cause, ordered the bank to stop payment.

*Knowledge of the maker/drawer: 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.

Valid Defense – payment; Requirement of Notice: Such maker or drawer will not be liable if he pays the holder thereof
the amount due thereon, or makes arrangements 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.

DUTY OF THE DRAWEE: 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.

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.

In all prosecutions under BP Blg 22, the introduction in evidence of any unpaid and dishonored check, having the drawee's
refusal to pay stamped or written thereon or attached thereto, with the reason therefor as aforesaid, shall be prima facie
evidence of:
1. The making or issuance of said check, and
2. The due presentment to the drawee for payment and
3. The dishonor thereof, and
4. 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.

CREDIT CONSTRUED: The word "credit" as used herein shall be construed to mean an arrangement or understanding with
the bank for the payment of such check.

EFFECT OF ACQUITTAL ON CIVIL LIABILITY: An acquittal does not entail the extinguishment of the civil liability for the
dishonored checks. An acquittal based on lack of proof beyond reasonable doubt does not preclude the award of civil damages.
(Mateo v. People, GR 200090, March 6, 2013)

PENALTY:
1. Imprisonment – not less than 30 days but not more than 1 year
2. Fine – not less than but not more than double the amount of the check, which fine shall not exceed the amount of P200,000;
or
3. Both, at the discretion of the court.

Prescriptive period: Prescriptive period of BP 22 Violation of B.P. Blg. 22 prescribes in four (4) years from the commission
of the offense or, if the same be not known at the time, from the discovery. thereof

DIFFERENCE WITH ESTAFA BY POST-DATING OR ISSUING A CHECK:

a. GOOD FAITH IS A DEFENSE IN ESTAFA: So that when the accused who issued the check believing that he would be
able to make the corresponding deposit, informed the complainant, when he sensed that he could not make the deposit,
not to present the check to the bank for cancellation, he could not be held liable for Estafa. (See People vs. Villapando) By
informing the payee, there is no deceit. (Firestone Tire and Rubber Co. of the Philippines vs. Ines Chavez)

In BP Blg. 22, good faith is NOT a valid defense.

b. PAYMENT OF A PRE-EXISTING OBLIGATION – NO ESTAFA: If the check is in payment of a pre-existing obligation there
is no deceit and hence, the crime of Estafa cannot exist.

In BP Blg. 22, even if the check is issued to pay a pre-existing obligation, there may still be liability.

c. ESTAFA MAY BE COMMITTED BY MERELY ISSUING A WORTHLESS CHECK – unlike in BP Blg. 22 which requires that
the accused BOTH drew and issued the check.

d. PERIOD TO MAKE GOOD THE CHECK – is only 3 days in estafa, but 5 banking days in BP Blg. 22.

LIABLE FOR BOTH ESTAFA AND BP 22: Under Sec. 5 of BP Blg. 22, the prosecution thereof shall be without prejudice to any
liability for violation of any provision of the RPC. It is now well settled that a single act can give rise to Estafa and at the same
time to violation of BP Blg. 22.

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ReSA – THE REVIEW SCHOOL OF ACCOUNTANCY
ANTI-BOUNCING CHECKS LAW RFBT-17
MULTIPLE CHOICE QUESTIONS

1. Knowledge of insufficiency of funds in BP Blg 22 would be presumed if the check was presented within __ days from the
date of the check
A. 30
B. 60
C. 90
D. 120

2. The drawer and issuer of the worthless check will not be liable under BP Blg. 22 if he pays the holder or makes arrangements
for the payment in full by the drawee of the amount of the check within ___________ after receiving notice that such check
has not been paid by the drawee:
A. 3 calendar days
B. 3 banking days
C. 5 calendar days
D. 5 banking days

3. The stamp of the drawee written on the dishonored check, with the reason therefor, shall be prima facie evidence of the
following, except:
A. Making or issuance of the check
B. Due presentment to the drawee for payment
C. The dishonor of the check
D. None of the choices is an exception

4. This shall be construed to mean an arrangement or understanding with the bank for the payment of the subject check
under BP Blg 22:
A. Arrangement
B. Contract
C. Credit
D. Loan

5. Violation of BP Blg. 22 may subject the accused to a fine not to exceed:

A. P100,000
B. P200,000
C. P500,000
D. P1,000,000

6. Good faith is a valid defense in:

A. Estafa by postdating or issuing a worthless check
B. BP Blg 22
C. Both Estafa and BP Blg 22
D. Neither Estafa nor BP Blg 22

7. Neal Caffrey issued a check to Peter Burke as payment for goods purchased by the former from the latter. Peter presented
the check 30 days from the date of the check and the same was dishonored due to insufficiency of funds. Assuming the
notice requirement has already been complied with, Neal
A. Can be guilty of violating the Anti-Bouncing Checks Law
B. Can be guilty of Estafa for issuing a worthless check
C. Can be guilty of violating both the Anti-Bouncing Checks Law and Estafa for issuing a worthless check
D. Did not commit any crime

8. Neal Caffrey issued a check to Peter Burke which induced the latter to deliver goods in exchange for the check. Peter
presented the check 30 days from the date of the check and the same was dishonored due to insufficiency of funds.
Assuming the notice requirement has already been complied with, Neal
A. Can be guilty of violating the Anti-Bouncing Checks Law
B. Can be guilty of Estafa for issuing a worthless check
C. Can be guilty of violating both the Anti-Bouncing Checks Law and Estafa for issuing a worthless check
D. Did not commit any crime

9. In the violation of the Anti-Bouncing Checks Law, the accused must be:
A. The issuer
B. The drawer
C. Both the issuer and drawer
D. Either the issuer or the drawer

10. In the violation of Estafa involving worthless checks, the accused must be:
A. The issuer
B. The drawer
C. Both the issuer and drawer
D. Either the issuer or the drawer

1. C 6. A
2. D 7. A
3. D 8. C
4. C 9. C
5. B 10. D

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