Republic of the Philippines

National Capital Judicial Region

METROPOLITAN TRIAL COURT
Makati City, Branch 66

PEOPLE OF THE PHILIPPINES,

Plaintiff,

versus
Criminal Case No. 07-52665-74
HENRY CHAO, FOR: Violation of BP 22
Accused.
x----------------------------------------x

MEMORANDUM

COMES NOW THE ACCUSED, through the undersigned counsel,

unto this Honorable Court most respectfully submits and presents
this Memorandum in the above-titled case and aver that:

I. STATEMENT OF CASE

The accused is being charged before the court with five counts of
violation of Batas Pambansa Blg. 22. Batas Pambasa Bilang 22 penalizes
the making or drawing and issuance of check without sufficient funds or
credits and for other purposes. On June 1, 2011, the accused, in behalf of
Atlas Parts, borrowed from the complainant the amount of ₱50,000.00
with 5% interest payable in five equal monthly installments. He then
issued five post-dated Negotiable Order of Withdrawal slips after the
receipt of the loaned amount. On their respective due dates, the plaintiff
deposited each of them to his Savings Account at BOD Bank, Manila City
Hall Branch in Manila, but all of them were dishonored by the drawee,
Alloy Bank, for the reason "Account Closed." Is the accused guilty and
personally liable for the NOW slips he issued against a closed bank
account under Batas Pambansa Bilang 22?

1
 II. STATEMENT OF FACTS

The accused Henry Chao was the Manager of Atlas Parts when he
borrowed, from the complainant the amount of P50,000, with 5%
interest, payable in five (5) equal monthly installments of P 12,500.

After the complainant gave the P50,000 cash in his house in

Mandaluyong City, the accused issued and signed five post-dated
Negotiable Order of Withdrawal1 (NOW) slips and handed it over to the
complainant. The NOW account was owned by the Atlas Parts
maintained under the Alloy Bank – Pasong Tamo Branch in Makati.

On their respective due dates, the Complainant deposited each of the

NOW slips to his Savings Account at BOD Bank – Manila City Hall Branch
but were returned2 by the bank together with several debit advices. All
of slips were dishonored by the drawee, Alloy Bank, for the reason
"Account Closed."

After each dishonor, the complainant personally went to Mr. Chao

and demanded payment of the loan from the latter. After the accused
failed to comply his demand, the complainant sent a formal demand
letter3 to the accused through a registered mail to his office address at
007 Malugay Street, Malabon City, giving him five (5) days to make good
his promise. The mailing was evidenced by Registry Receipt No. 3214
dated January 2, 2012 from the Mandaluyong City Post Office.

However, since the accused resigned as Manager of the Atlas Parts

sometime in the middle of June 2011, even before the first due date of
the NOW slips, he failed to receive the demand letter notice of the
dishonor.

Consequently, the complainant filed this case against the accused.

1
See Exhibit A-E
2
See Exhibit A-1 to E-1
3
See Exhibit F
4
See Exhibit G

2
 III. ISSUES OF THE CASE

A. WHETHER OR NOT THIS CASE CAN STILL BE DECIDED FOR

BEING FILED BEYOND THE PRESCRIPTIVE PERIOD.

B. WHETHER OR NOT THE INSTRUMENTS, WHICH ARE

NEGOTIABLE ORDER OF WITHDRAWAL SLIPS, ARE COVERED BY
THE BATAS PAMBANSA BLG. 22.

C. WHETHER OR NOT THERE HAS BEEN A SUFFICIENT NOTICE OF

DISHONOR.

III. DISCUSSION OF THE ISSUES

The case was filed beyond the

prescriptive period of four years
and hence barred by prescription.

Batas Pambansa Blg. 22 is a special act penalizing the making or

drawing and issuance of a check without sufficient funds or credit and
for other purposes. It provides the following punishment in violation
thereof:

xxx 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.5
[emphasis supplied]

On the other hand, Republic Act No. 3326 establishes the periods of
prescription for violations penalized by Special Acts and Municipal
Ordinances and provides when the prescription shall begin to run. This
law states that:

Violations penalized by special acts shall, unless otherwise

provided in such acts, prescribe in accordance with the
following rules: xxx (b) after four years for those punished

5
Sec 1 BP Blg 22

3
 by imprisonment for more than one month, but less than
two years; xxx6 [emphasis supplied]

The same law further states that the prescription “shall begin to run
from the day of the commission of the violation of the law”7 or from the
discovery thereof.

Since BP Blg 22 is a special law which provides its penalty for

violation but not its prescription period for the filing of action, RA No.
3326 serves as its suppletory with regard to the prescription period. It
can be gleaned then that for actions against persons who commit acts in
violation of BP Blg 22, the same must be filed within four years from
notice of such dishonor.

The complainant received notice of the lack of funds or closed

account after the first NOW slip dated July 1, 2011 was deposited,
dishonored and returned by his bank. However, it was only in
September 2019, after more than eight years had passed that he filed
the case in court. Since the complainant filed the case beyond the
prescription period as provided by the law, the case is barred by
prescription and should not prosper.

The prescriptive statutes serve to protect those who are diligent and
vigilant, not those who sleep on their rights. The rationale behind the
prescription of actions is to prevent fraudulent and stale claims from
springing up at great distances of time, thus surprising the parties or
their representatives when the facts have become obscure from the
lapse of time or the defective memory or death or removal of the
witnesses.8

The Negotiable Order of

Withdrawal (NOW) slips are not
checks or bills of exchange and are
therefore not covered under Batas
Pambasa Blg. 22.

The Batas Pambansa Blg 22 specifically states that any person who
makes or draws and issues a check and the check was subsequently
dishonored by the drawee bank for insufficiency of funds or the drawer

6
Sec 1 RA No. 3326
7
Id. Sec 2
8
Antonio v. Morales, GR No. 165552 January 23, 2007

4
ordered the bank to stop payment without valid reason, is punishable in
accordance to its provisions.9

A check is a bill of exchange drawn on a bank payable on demand.10

On the other hand, a bill of exchange is an unconditional order in
writing addressed by one person to another, signed by the person giving
it, requiring the person to whom it is addressed to pay on demand or at
a fixed or determinable future time a sum certain in money to order or
to bearer.11

A Negotiable Order of Withdrawal (NOW) slips is a document

authorizing the payee to drw against the NOW account of the payor. A
NOW account is an interest-earning savings bank account.12 A NOW slip
is payable to a specific person and is not negotiable. Hence, is not
covered under the Negotiable Instruments Law.

A NOW slip is not a check, a bill of exchange nor a negotiable

instrument under the Negotiable Instruments Law. Since it is not
negotiable, its nature is not that of a check contemplated under Batas
Pambansa Blg. 22. Therefore, the issuance of dishonored NOW slips is
not covered under BP Blg 22 and is therefore not punishable by the
same.

There is no sufficient evidence to

prove that notice of the dishonor
was received by the accused.

To hold a person liable under B.P. Blg. 22, the prosecution must not
only establish that a check was issued and that the same was
subsequently dishonored, it must further be shown that accused knew
at the time of the issuance of the check that he did not have sufficient
funds or credit with the drawee bank for the payment of such check in
full upon its presentment.13

This knowledge of insufficiency of funds or credit at the time of the

issuance of the check is the second element of the offense. Section 2 of
BP Blg. 22 provides the presumption of evidence of the knowledge of

9
Supra, Note 5
10
Sec 185, Negotiable Instruments Law
11
Id. Sec 126
12
Investopedia. Introduction to the Negotiable Order of Withdrawal (NOW) Account. Retrieve September
26, 2019 from https://www.investopedia.com/terms/n/nowaccount.asp
13
Resterio v. People of the Philippines, GR No. 177438 September 24, 2012

5
insufficiency of funds. For this presumption to arise, the prosecution
must prove the following: (a) the check is presented within ninety (90)
days from the date of the check; (b) the drawer or maker of the check
receives notice that such check has not been paid by the drawee; and (c)
the drawer or maker of the check fails to pay the holder of the check the
amount due thereon, or make arrangements for payment in full within
five (5) banking days after receiving notice that such check has not been
paid by the drawee. In other words, the presumption is brought into
existence only after it is proved that the issuer had received a notice of
dishonor and that within five days from receipt thereof, he failed to pay
the amount of the check or to make arrangements for its payment. The
presumption or prima facie evidence as provided in this section cannot
arise, if such notice of nonpayment by the drawee bank is not sent to the
maker or drawer, or if there is no proof as to when such notice was
received by the drawer, since there would simply be no way of
reckoning the crucial 5-day period.14

A notice of dishonor received by the maker or drawer of the check is

thus indispensable before a conviction can ensue. The notice of
dishonor may be sent by the offended party or the drawee bank. The
notice must be in writing. A mere oral notice to pay a dishonored
check will not suffice. 15[emphasis supplied]

Jurisprudence provides that a quantum proof beyond reasonable

doubt must be present to predicate the existence of the second element
of the offense. In order to sufficiently established that written demand is
served, through a registered mail, and due notice is given to the issuer of
the check, it must be supported with registry return receipts
accompanied by authenticating affidavit of the person or persons who
had actually mailed the written notices of dishonor or the testimony in
court of the mailer or mailers on the fact of mailing. 16

To prove that he had sent the written demand letter to the accused
by registered mail, the complainant presented the registry receipt17
dated January 2, 2012. Aside from the registry receipt, no other
document was presented to established that the demand letter was duly
served to the accused. Moreover, in the pre-trial brief, the accused
denied receiving the written demand letter. Thus, the prosecution failed

14
Id.
15
Id.
16
Id.
17
Supra. Note 4

6
to provide a proof beyond reasonable doubt the presence of the second
element of the offense.

Also, that the complainant verbally demanded payment from the

accused due to the dishonor of the NOW slips which the latter issued did
not satisfy the requirement of showing that written notices of dishonor
had been made to and received by the latter. The verbal notices of
dishonor were not effective because it is already settled that a notice of
dishonor must be in writing.18

PRAYER

WHEREFORE, premises considered, it is respectfully prayed that

the instant criminal complaint be DISMISSED for lack of merit.

FURTHER, the respondent respectfully pray for such and other

reliefs as may be deemed just and equitable under the premises.

IN WITNESS WHEREOF, I have hereunto set our hands this 26th

day of September 2019 in Makati City, Philippines.

18
Supra. Note 16