BATAS PAMBANSA BILANG 22: - Accommodation Check - a check for the

THE BOUNCING CHECK LAW purpose of lending a person's name to

another.
When did BP 22 take effect? - Guarantee Check – may either be an
• June 29, 1979 accommodation check, or any other kind of check
drawn and delivered to guarantee the
What is the specific purpose of the law? performance of a principal obligation.
• To put a stop to the harmful practice of circulating - Foreign Check – check drawn against a foreign
valueless commercial papers.
bank. Checks drawn and issued in the Philippines,
• The gravamen of the offense punished by BP 22 is
though payable outside, are within the coverage
the act of making and issuing a worthless
of the law
check or a check that is dishonored upon its
presentation for payment. Note: It DOES NOT COVER manager’s check and
cashier’s check due to its peculiar character and general
Mala prohibita or use in the commercial world, it is as good as the money
Mala in se or it represents and is therefore deemed cash.
Malum
Malum in se
prohibitum
A special law Inherently wrong/ What is meant by issuing a Check?
Definition
prohibits it Wrong it itself • To issue a check is to deliver the instrument
Act of issuing a complete in form for the first time to a person who
worthless check, takes it as a holder.
Murder, robbery,
Examples Illegal possession of
theft, estafa, etc.
firearms, Prohibited What constitutes funds?
drugs
• Funds – may either be deposit of money or
Crime punished by
Needs to prove deposit of currency.
special law without
ill motive (Fraud,
need of proving ill
Deceit) What is meant by credit?
motive for the act
• Credit – is an arrangement or understanding with
Is BP 22 constitutional or not? the drawee bank for the payment of the check
✓ Yes. It is constitutional. It is an exercise of the issued (different from accounting “credit” and
police power of the State. “credit” transactions)
➢ If the check bounces, drawer is given 5 days to
• The gravamen of BP 22 is the issuance of the settle the credit, after which necessary dishonor
worthless check, not the payment of obligation. was given in writing, the case can be filed in court
• It DOES NOT VIOLATE equal protection clause; and in violation of BP 22.
• It DOES NOT INVOLVE undue delegation of
legislative power of the payee. What is "dishonor" of a check?
• A check is dishonored when, upon being presented
Does it violate the non-imprisonment clause? for payment, the same is refused or that payment
 No. It penalizes the issuance of the worthless cannot be made (Dishonor by non-payment).
check and not the non-payment of a debt. • Upon refusal of payment to the holder of the
check, the bank stamps, writes, or prints on the
Does it violate the non-impairment clause? check or paper attached to it the:
 No. Checks are not mere contracts but are 1. date of check presented and
substitutes for money. They form part of the 2. reason for refusal to pay it.
banking system. Non-impairment of contract clause
applies only to lawful contracts; What does an order for a "stop payment” mean to the
drawee bank?
What is a check? • Simply put, the drawer of the check informs the
• A check is a bill of exchange drawn on a bank drawee bank not to pay the amount of the check.
payable on demand (sec. 185, NIL). • However, despite the receipt of an order for a "stop
payment", the drawee bank still stamps in the
What are the checks covered by BP 22?* check, or attaches a return check advice or slip with
• It covers any check, whether it is present-dated a notation that there were no sufficient funds in or
or post-dated; issued to apply on account (to pay credit with the bank for the payment in full of the
a pre-existing debt) or for value; guarantee, check. (Still covered by BP 22)
accommodation or deposit check; crossed
check, memorandum check; and a foreign What is a “bouncing check”?
check. A check “bounces” either because:
- Post-dated Check (PDC) – one that is dated • There is not enough money or credit in a bank to
after it is issued and delivered. It is not cover its amount.
intended to be encashed immediately but a - Drawn Against Insufficient Funds check
date after the issuance and delivery. (DAIF) - is one that is issued for an amount more
than the actual available funds in a particular
account.

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 DAUD (Drawn Against Uncollected Deposit)
- DUTY OF DRAWEE IF CHECK BOUNCES
- a banking phrase which is equivalent to a check
with insufficient funds. 1. To stamp, write, or print on the check or paper
- Non-Sufficient Funds check (NSF) attached to it (1) date of check presented and (2)
• Drawn against a closed account. reason for refusal to pay it. Despite the order to stop
payment or countermand, drawee still has the duty
Is there a bank charge for a bounced check? to stamp if insufficiency of funds exists. It should
✓ Yes. There is a service charge for an amount on a always be explicitly stated in the notice of
per returned check. dishonor or refusal.
• The bank charge goes to the drawee and the 2. Notice of dishonor. (Must be in writing)
collecting bank. 3. Give drawer a 5-day period to settle the
insufficient funds
ACTS OR OFFENSES PUNISHABLE UNDER BP 22 Note: Jurisdictional in nature, condition-precedent before
filing a case and that the check must be in existence.
Any person who A person who has
makes or draws sufficient funds What is deemed to be a prima facie evidence of a
and issues a check but failed to issuance of a bounced check under BP 22?
where he knows keep sufficient • The Check itself. The unpaid and dishonored check
he does not have funds or to with the drawer’s refusal to pay stamped, written, or
sufficient funds maintain the
printed on it. (Different from the prima facie of
OFFENSES in or credit with the
credit to cover full
insufficiency of funds)
drawee bank for amount of check
the payment of within a period
such check. of ninety (90) What is the evidence knowledge of insufficient funds?
days from the • When a bounced check is presented within ninety
date of issuance (90) days from the date of check.
of check. • The issuer’s knowledge from the insufficiency of the
1. Issuance of any 1. Drawer of the funds is presumed from the dishonor of the
check check has check.
2. On account or sufficient
for value funds What is the importance of the notice of dishonor to
Elements
3. Issues knows 2. He/she makes
of the establish a prima facie evidence of knowledge of
at the time of and issues a
offense insufficiency of funds?
issuance; he check
does not have 3. Failed to keep • The presumption is brought into existence only after
sufficient funds. sufficient it is proved that the issuer had received a notice
funds of dishonor and that within five (5) days from
Note: The 90-day period to deposit the check is NOT receipt thereof, he failed to pay the amount of the
AN ELEMENT of the offense. It is merely a condition check or make arrangement for its payment.
for the prima facie presumption of knowledge of
insufficiency of funds. DUTY OF A DRAWER IF CHECK BOUNCES
A check has a life of 180 days (6 months) before
being considered a stale check.
Must make good the check by paying the holder or by
making arrangement for its payment within 5
• If the check was presented during the first 90
days after issuance and it bounces, there is banking days after receipt of notice.
presumption of knowledge of insufficiency of • Failure to do so will make the drawer liable for
funds. violation of BP 22.
• If the check was presented after the 90 days from
issuance, there is no presumption of knowledge Who Is Liable Under Bp 22?
of insufficiency of funds.
Who issued? Who is liable?
Note: Presumption is brought to existence ONLY Bounced checks
AFTER it is PROVED that the issuer had received a issued/drawn by
notice of dishonor and that within 5 banking Signatory or signatories
natural persons
days from receipt, he failed to pay the amount of in their names
the check or make arrangement for its payment.
Bounced checks
Does it mean that the maker should maintain issued/drawn by
sufficient funds or credit with the bank to cover the Person or persons who actually
corporations,
check for only 90 days? signed the bounced check
companies, or
entities
 No. He has to maintain sufficient funds or credit Note:
with the bank until the check becomes stale, • The accused may be accorded enough
which is by current practice after 180 days. opportunity to present evidence that would
• Even if the check is presented to the bank after 90 prove that despite being an officer of the
days, the law will still apply if the check bounced corporation and a signatory to the check he is not
for insufficiency of funds. (Still covered by BP 22 liable.
but has no presumption of knowledge)
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 • Notice of dishonor must be in writing and must What is estafa?
be given to the person himself. • Swindling or estafa is committed by any person who
• Mere oral notice or demand to pay is through confidence or deceit defrauds another.
insufficient for conviction under BP 22. • Fraud in estafa through deceit should be proved by
• A signatory of a check not informed of the clear and positive evidence.
dishonor will not be liable.
• Committed by post-dating a check or issuing the
same in payment of an obligation when the maker of
JURISDICTION VS VENUE
the check has no funds or were insufficient.

Jurisdiction Venue
What constitutes prima facie evidence of deceit?
Power to decide. Place of Trial.
• Failure of drawer to deposit within 3 days from
Courts: receipt of notice from the bank.
(MTC → RTC → CA → SC)
MTC has exclusive Filed in any place What is the difference of BP 22 and estafa?
jurisdiction over BP 22. where any of the
principal elements were Point of Bouncing
Estafa (RPC)
Note: Only BP 22 is under committed. Distinction Check
MTC, all other special laws Nature of Against public
Against property
covered in the CPALE is Violation of BP 22 can Crime interest
under RTC. be filed at the places of Offense Mala prohibita Mala in se
issue, delivery, and Deceipt and
dishonor of the check. Elements Mere issuance
damage
30 days – 1-year Severe or longer
Penalty
CLASSIFICATION OF AN OFFENSE OF BP 22 imprisonment penalty
Drawer’s
Issuance of a bounced check is a continuing offense knowledge
Required NOT required
(transitory or continuous). There is continuance or of
repetition of the offense wherever the defendant is found. insufficiency
Period to
5 days 3 days
settle
What is the importance of the notice of dishonor to
establish a prima facie evidence of knowledge of
PERIOD OF PRESCRIPTION
insufficiency of funds?*
Substantial Evidence – relevant evidence as a Acquisitive prescription – adverse possession and
reasonable mind might accept as adequate to support a usucapcion
conclusion. EXTINCTIVE PRESCRIPTION – rights and actions are
Preponderance of evidence – greater weight of the lost by the lapse of time (BP 22 applies here)
evidence. (Usually for civil cases) • Violation of BP 22 prescribes within four (4)
PROOF BEYOND REASONABLE DOUBT – Judge has years from its date of commission.
no doubt. (Usually for criminal cases such as BP 22) • Period is counted from the end of the 5 banking
days within which the drawer of the check may
What principle may be applied by the court in the abate the criminal action by paying the amount of
imposition of penalties in BP 22 cases? the check.
• Rule of preference in the application of penal • To avoid prescription there must be due
provisions of BP 22 must be observed. Meaning the presentment of the check to the banks within a
decision rests solely upon the judge. reasonable time from issue.
• The penalty of imprisonment should not be
applied for violations of the law if the accused is a REJECTED DEFENSES ACCEPTED DEFENSES
first-time offender, and the issuance of the check UNDER BP 22 UNDER BP 22
was the offshoot of a legitimate business • Surrounding • Required notice of
transactions. circumstances dishonor was not
generally irrelevant given
What are the penalties under BP 22?* • Lack of consideration • Payment as valid
• Underlying defense under BP 22
1. Imprisonment – 30 days to 1 year
Transaction did not • Varying of critical
2. Fine – Not less than but not more than double the
materialize dates
amount of check (maximum is ₱200,000) • No bad faith or malice • When stop-payment
3. BOTH imprisonment and fine on the part of the was to protect against
Note: issuer, maker or complainant's
• There is NO DOUBLE JEOPARDY for being charged drawer wrongful act
twice under BP 22 and ESTAFA since the principle • No checking account • Closing of account
speaks of punishment for the same offense and NOT or account has been upon advise of Bank
the same act. A single act may be an offense closed • No authority to
against two statutes. • Check issued merely receive check
• A person can also be liable at the same time for as guarantee or • The fact that check
violation of BP 22 and Estafa. evidence of debt was stolen

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 • Prior knowledge of • The check was Stale check
payee of insufficiency presented beyond 180 • It is one which has not been presented for
of funds days from maturity payment within a reasonable time after its issue. It
• Signatory mere thereof is valueless and therefore should not be paid.
corporate officer • Valid cause to stop • In the Philippines, banking practice presently regards
versus mere payment, such as the as a stale check outstanding for more than six (6)
employee right of installment
months or 180 days.
Stay order in corporate buyer under PD 957
rehabilitation proceeding
prevent the payment of Kiting Game or Check Kiting
the corporate check • Kiting or Check Kiting is a specie of fraud or
fraudulent practice consisting of exchange of
checks of approximately the same dates and
RELATED TOPICS IN CHECKS amounts.
• A kite is a check drawn against uncollected funds in
Certification Of A Check a bank account.
• The check is issued with sufficient funds in the
hands of the drawee bank and the funds have Cases when bank may refuse payment
been set apart for its satisfaction, or such funds • The bank is insolvent;
shall be applied whenever the check is • The drawer's deposit is insufficient, or he has no
presented for payment. account with the bank or said account had been
• An agreement by the bank against whom a check is closed or garnished;
drawn that the check will be paid when presented for • The drawer is insolvent and proper notice is
payment. received by the bank;
• The drawer dies and proper notice is received by
Effects of Certification of Check: the bank;
1. It is equivalent to acceptance, making the bank • The drawer has countermanded payment (stop
primarily liable. payment);
2. It discharges persons secondarily liable if • The holder refuses to identify himself;
procured by the holder. • The bank has reason to believe that the check is a
3. It operates as an assignment of the funds of the forgery;
drawer in the hands of the drawee bank. • The check is stale or post dated
4. The payee or holder becomes the depositor of the
drawee bank; and
5. The drawer may not issue a stop payment order
on the certified check.

Cross Check
• In usual practice, crossing of a check is done by
placing two parallel lines diagonally on the left
portion of the check.
• The reason for the issuance of a crossed check is to
ensure that the check is encashed only by the
rightful payee

Effects of Cross Check:

1. It may not be encashed but only deposited in a
bank.
2. It may be negotiated only once — to one who has
an account with the bank;
3. It serves as a warning to the holder that the check
has been issued for a definite purpose so that
he must inquire if he has received the check pursuant
to that purpose, otherwise he is not a holder in due
course.

Is Check A Legal Tender?

 No. All coins and notes issued by the Central Bank of
the Philippines guaranteed by the Government of the
Republic of the Philippines shall be the legal tender
in the Philippines for all debts, both public and
private (Section 52, RA 7653, also known as the New
Central Bank Act).

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