Bouncing Check Law

BP Bldg. 22

Prof. Joshua S. Umali, CPA

 Distinction between BP22 and Estafa
BP 22 (Bouncing Checks Law)
(mala prohibita)
Even though the check was issued in payment of pre-
existing obligation, liability is incurred.
Damage or deceit is immaterial to criminal liability
Crime against public interest for the act is penalized
due to the disastrous effect to the stability of the
banking system and prejudice to the economy
Only the drawer is liable and if the drawer was a
juridical entity, the officer thereof who signed the
check shall be liable. The indorser is not liable.
Drawer is given 5 banking days from notice of
dishonor to make good the check to avoid criminal
liability.
Estafa
(mala inse)
The check is issued concurrently and reciprocally in
payment of the exchange consideration. It mustAssets
Personal not
be for a pre-existing obligation.
Damage to the offended and deceit of offender are
essential elements
It is a crime against property
Not only the drawer but even the indorser may incur
liability if he were aware at the time of the
indorsement of the insufficiency of funds.
Drawer is given 3 calendar days after notice of
dishonor to make good the cash value to avoid
liability.
 Who are liable?

1. 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. Personal Assets
• Which check is subsequently dishonored for the same reason had not the drawer, without any
valid reason, ordered the bank to stop payment (Sec. 1st par, BP22)
2. 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 90 days from the date appearing thereon, for which reason it is
dishonored by the drawee bank. (Sec. 1 2nd par, BP22)
3. 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. (Sec. 1 3rd par, BP22)
 Penalty for BP 22 violation (Sec. 1 BP 22)

1. Imprisonment of not less than 30 days but not more than 1 year or;
2. 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;
3. Both such fine and imprisonment at the discretion of the court. Personal Assets
 Elements of the offense under BP 22

1. Making, drawing and issuing any check to apply on account or for value.
a. The first element, i.e., making, drawing, and issuance of any check, requires that the check be properly
described in the information to inform the accused of the nature and the cause of the accusation against him.
Without a sufficient identification of the dishonored check in the information, the conviction ofPersonal
the accused
Assets
should be set aside for being violative of the constitutional requirement of due process. (Ongson v. People
G.R. No. 156169 August 12, 2005)
b. The supreme court has held that upon issuance of a check, in the absence of evidence to the contrary, it is
presumed that the same was issued for valuable consideration, which may consist either in some right,
interest, profit, or benefit accruing to the party who makes the contract, or some forbearance, detriment,
loss or some responsibility, to act, or labor, or service give, suffered or undertaken by the other side. It is an
obligation to do or not to do in favor of the party who makes the contract, such as the maker or endorser.
c. The fact that the object of the contract was not of good quality is irrelevant in the prosecution of a case
involving BP22, for the said law was enacted to prohibit, under pain of penal sanctions, the making of
worthless checks and putting them in circulation. It is not the non-payment of an obligation which the said
law punishes, but the act of making and issuing a check that is dishonored upon presentment for payment.
 Elements of the offense under BP 22

1. Making, drawing and issuing any check to apply on account or for value.
a. In De Villa v. CA, decided April 18, 1991, it was held that under Batas Pambansa Blg. 22, there is no distinction
as to the kind of check issued. As long as it is delivered within Philippine territory, the Philippine courts have
jurisdiction. Personal Assets
b. In People v. Nitafan, it was held that as long as the instrument is a check under the negotiable instrument
law, it is covered by Batas Pambansa Blg. 22.
 Elements of the offense under BP 22

2. 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 sin full upon its presentment.
a. The maker’s knowledge is presumed from the dishonor of the check for insufficiency of funds. This element involves the state of
mind which is difficult to establish, thus the law creates a prima facie presumption of such knowledge.
b. Requisites for the presumption of knowledge of insufficiency of funds: (Sec. 2 BP22) Personal Assets
I. The check is presented to the bank within 90 days from the date of check
II. The drawer or maker receives notice that such check has not been paid by the bank
• A written notice of dishonor received by the maker or drawer of the check is indispensable. The notice may be
sent by the offended party or the drawee bank. A mere oral notice to pay a dishonored check will not suffice. The
lack of a written notice is fatal for the prosecution.
• The Court has in truth repeatedly held that the mere presentation of registry of return receipts that cover
registered mail was not sufficient to establish that written notices of dishonor had been sent or served on issuers
of checks, The authentication by affidavit of the mailers was necessary in order for service by registered mail to
be regarded as clear proof of the giving of notices of dishonor and to predicate the existence of the second
element of the offense.
III. The drawer or maker fails to pay the holder of the check in the amount due thereon or make arrangements for payment
in full within five banking days after receiving notice that such check has not been paid by the drawee.
 Elements of the offense under BP 22

3. Subsequent dishonor of the check by the bank for insufficiency of funds or credit, or dishonor of the check
for the same reason had not the drawee, without any valid reason, ordered the bank to stop payment.
a. 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,
Personal the
Assets
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.
b. In all prosecutions under this act, 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 the making or issuance of said check, and the due presentment to
the drawee for payment and the dishonor thereof, and that the same was properly dishonored for the reason
written, stamped or attached by the drawee on such dishonored check. (Sec. 3 BP22)
c. 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. (Sec. 3
BP22)
 Credit Construed (Sec. 4 B.P. 22)

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

understanding with the bank for the payment of such check.
Personal Assets
 Liability under the Revised Penal Code. (Sec. 5 B.P. 22)

Prosecution under this Act shall be without prejudice to any liability for violation of any
provision of the Revised Penal Code.
Personal Assets
• Prosecution for estafa does not preclude that for B.P. 22. There is no double jeopardy
since B.P. 22 is a crime against public interest. Even if there is no deceit, mere
dishonor of the check already creates public disturbance and prejudice to the banking
system.
• Considering the volume of checks issued daily, serious disturbance in the banking
system is caused. The fraud is against in the public.
• In BP22, one need not prove that the check was issued in payment of an obligation or
that there was damage. The damage done is to the banking system.