Blog Lecture No. 42: Bouncing Checks

For today, let’s discuss what the government, thanks to the massive deals brought about by last weeks’ fiasco, is now vulnerable to.

The law on bouncing checks can be found in Batas Pambansa Blg. (National Law No. 22). It states:

Any person who makes or draws and issues any check to apply on 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, shall be punished by imprisonment of not less than thirty days but not more than one (1) year or by a fine of not less than but not more than double the amount of the check which fine shall in no case exceed Two Hundred Thousand Pesos, or both such fine and imprisonment at the discretion of the court.

The same penalty shall be imposed upon 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 ninety (90) days from the date appearing thereon, for which reason it is dishonored by the drawee bank.

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

What are the acts punished under this law?

1. Drawing and issuing any check to apply on account or for value, knowing at the time of issue that he does not have sufficient funds, then the check bounced.

Here, the person issued the check to pay for something, knowing fully well that he has no sufficient funds to cover the issued check. As a separate crime, this likewise constitutes estafa under Article 315 (2) (d) of the Revised Penal Code.

2. 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, but at the time of issuance, there were sufficient funds.

Here, the issued check initially can be covered with sufficient bank funds. But when encashed within 90 days from the date in the check, it bounced. Here the offender is punished for failing to maintain sufficient funds and not for issuing an empty check per se.

Who are the one punished under this law?

1. Any person who draws or issues the bum check

2. If the check is drawn by a corporation, company or entity, the person or persons who actually signed the check in behalf of such drawer. This includes government checks.

What are some of the defenses for this offense?

They are:

1. Prescription (simply means the expiration of the right to prosecute the offense)

Here the prescription period if four years from five-day notice of dishonor (notice to drawer that the check bounced and giving him/her 5 days to make good the check) (Act 3326, as amended)

2. Payment within the five day notice of dishonor

Breakfast time!

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9 Comments

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9 responses to “Blog Lecture No. 42: Bouncing Checks

  1. Prof. Punzi,

    I heard there is a new jurisprudence in B. P. Blg. 22 called the Betty King case wherein it stated that the demand letter must be personally received by the accused. Otherwise, the case can be dismissed.

    I used to handle BP 22 cases but since it has lost much of its teeth, I do not handle them anymore and am no longer updated with its jurisprudence. Is that the import of the Betty King case?

    Thanks for the lecture.

  2. What other loopholes are there in BP 22?

  3. Atty. Lacierda,

    I was supposed to include that case here, but I decided not to. I wanted to hold back so I can still earn a living…heheheheh!

    But since you already put it there… ok na rin…

  4. Sam

    Muntikan na akong ma-BP22 minsan. Hindi ko nahabol on time ang pondo sa cheke na inisyu ko.Sa susunod kung mangyari ulit sa akin, i’ll contact you atty. ok lang?

  5. ahh bouncing checks are tricky! Does that mean the accused should get a letter of demand for payment from the accuser when the check bounces. If not , the case will be dismissed?

  6. @Sam: No prob.

    @Duke: If that fact is apparent after trial, the case will be dismissed and you cannot refile because of double jeopardy.

    If it is still in the early stages, you can still remedy the situation by having the demand letter personally received.

  7. tess baluyot

    if the person is already abroad and obviously did not receive the demand letter, instead its the spouse who received it, will the spouse be liable? can the authorities sheriff the properties of the borrower who is abroad?its a personal loan availed of the borrower thru her previous emplyment but without the knowledge of the husband, amounting to P270,000 which is now Pmore than P300,000 according to the demand letter.

  8. @Tess: No. unless it was the spouse that drew on the check. But as you have said above, the spouse is not the drawer of the check so that spouse would not be liable. It will still be the actual drawer who should have personally received the demand letter.

    Thanks for reading.

  9. mike

    Hi Atty.

    I am just confused about the ruling of the supreme court on BP 22 cases. I have read that when the accused informed the complainant that the checks being issued is unfunded there is no violation of BP22. On the other hand, the court ruled that the knowledge of the payee of the insuficiency or lack of funds of the drawer with the drawee bank is immaterial. Likwise, the recent case about the issue of notice of dishonor, it is quite confusing that there are recent ruling by the court that the notice of dishonor is not essential in prosecution under BP 22.
    Please clarify Atty.

    Thanks.

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