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BATAS PAMBANSA BLG.

22
An Act Penalizing the Making or Drawing
and Issuance of a Check Without Sufficient
Funds or Credit and for other Purposes

Reported by:

MAE NIAGARA M. BALANAY


LLB-3, FSUU COL
BP Blg. 22 is called Anti-Bouncing
Check Law because a dishonored check
literally bounced back to the offended party
after presenting it to the drawee or
depository bank for payment or deposit.
NATURE OF THE CRIME

BP Blg. 22 was purposely enacted to prevent the


proliferation of worthless checks in the mainstream
of daily business and to avert not only the
undermining of the banking system of the country
but also the infliction of damage and injury upon
trade and commerce occasioned by the
indiscriminate issuances of such checks. By its very
nature, the offenses defined unde the law are against
public interest.
Section 1. Checks without sufficient funds.

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.
BP BLG. 22 may be violated in two ways:

1. By making or 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 in or credit with the drawee
bank for the payment of such check in full upon
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.
2. Having sufficient funds in or credit with the drawee bank
when he makes or draws and issues a check, by 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, for which reason
it is dishonored by the drawee bank.
Elements of ISSUANCE OF CHECK WITH INSUFFICIENT FUND
(Par. 1, Sec. 1)
1. That a person makes or draws and issues any check to apply
on account or for value.
2. That the accused knows at the time of the issuance 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.
3. That the 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.
FIRST ELEMENT: That a person makes or draws and issues
any check to apply on account or for value.
Requisites:
1. The accused makes or draws and issues an instrument;
2. The instrument issued is a check; and
3. The check is to apply on account or for value.
___________________________

1st Req. : The accused makes or draws and issues an instrument;


___________________________________

To be held liable under BP Blg. 22, the offender must either “makes and
issues” or “draws and issues” a check.
– One who “draws and issues” a worthless check
– One who “makes and issues” a check belonging to or under the account of
another person, if he has no account with the drawee bank.
“ISSUE A CHECK” – refers to the first delivery of the instrument complete in form
to a person who takes it as holder (Negotiable Instrument Law)
– Issuance of the check is essential ingredient of the offenses (1st and 2nd kind)
Ingredients of ISSUANCE:
1. The check must be complete in form;
2. Drawer delivered the check;
3. The person, to whom the check was delivered, took it as a holder.
____
1. The check must be complete in form;
– The signature of the drawer must appear on the check. Without the
signature of the accused, it could not be said that he issued a check, as
the signature of the drawer gives birth and life to the check.

Ex. In case a corporate check where more than one officer are required to
sign the check, proof that less than all the required signatories have
signed the check is a defense. The corporation did not issue the check
despite the same was delivered to the payee. The check was not
complete in form considering that not all of the required signatories
signed it.
The check must be complete in form;
__________________

“COMPLETE IN FORM” means the check contains the date of issuance


or maturity, the amount thereof, the name of the payee or a statement as
to whom it is payable and the signature of the drawer.

– Delivery of a signed blank check to the payee operates as a prima facie


authority to fill up the blanks therein. It becomes complete in form
when the payee complete the details of the check in accordance to the
given authority.
– Thus, the fact that the check was delivered not in a complete form is
not a defense provided that the completion thereof was made in
accordance to the authority given.
The check must be complete in form;
__________________

In Lunaria vs People, G.R. No. 160127, November 11, 2008 – Petitioner


argued that he could not have “drawn” or “issued” the subject check
because “it was not complete in form” at the time it was given to the
complainant. At the outset, it should be born in mind that the exchange of
the pre-signed checks without date and amount between the parties had
been their practice for almost a year by virtue of their money-lending
business. They had authority to fill up blanks upon information that a
check can then be issued in accordance with Sec. 14 of the Negotiable
Instruments Law. Because of the presumption of authority, the burden of
proof that there was no authority or that authority granted was exceeded is
carried by the person who questions such authority. Records show that
Petitioner had not proven lack of authority on the part of complainant to
fill up such blanks. Having failed to prove lack of authority, it can be
presumed that complainant was within his rights to fill up blanks on the
check.
2. Drawer delivered the check
__________________

–Delivery is either actual or constructive.


– Delivery of the check is essential to make the drawer liable for Violation
of BP Blg. 22. Drawing a bouncing check without delivery is not
constitutive of the crime under BP Blg. 22.

Ex.: X drew a check payable to Z in payment of his loan in the amount of


Php10,000. X Left the check on his table. Z saw the check on the table and
took it without consent of X. The check was subsequently dishonored
upon presentment for payment by the drawee bank for the reason “DAIF.”
Despite written demand to make good of the check, X failed to do so. X is
not liable for violation of BP Blg. 22 because he did not deliver the check to
Z.
The fact the check was stolen is a defense in BP Blg. 22.
The drawer did not deliver the check to the thief; the latter
unlawfully took it without consent of the former. Delivery and
unlawful taking are not the same. Further, the thief did not take
the check as a holder. (Ching vs Nicdao, G.R. No. 141181, April
27, 2007)

However the accused had the burden to prove that the


check was stolen. Failure to discharge such burden is enough to
convict him. (Caca vs CA, G.R. No. 116962, July 7, 1997).
3. The person, to whom the check was delivered, took it as a holder.
__________________

HOLDER means the payee or indorsee of the check, who is in possession


of it or the bearer thereof. If the check is payable to a specific person, the
holder is the payee indicated in the check. If the check is payable to “cash”
or “bearer”, the holder is the bearer of the check. If the payee indorses the
check, the holder is the indorsee.

Presumed Issuance of Check- the introduction in evidence of check with


statement of dishonor shall be prima facie evidence of the making or issuance
of said check. Bare assertion that the person did not issue the check is not
enough to overcome the said presumption.
2nd Req: The instrument issued by the accused is a check.

CHECK – it is a bill of exchange drawn on a bank and payable on demand. It is


a written order on a bank, purporting to be drawn against a deposit of
funds for the payment of all events, of a sum of money to a certain person
therein named or to his order or to cash, and payable on demand.

An instrument will be considered a check if the following ingredients


are present:
1. It must be a bill of exchange;
2. It must be drawn on a bank; and
3. It must be payable on demand.

A bill of exchange, as defined under Negotiable Instrument Law, is an


unconditional order in written 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.
To be held liable under BP Blg. 22, the drawee of the instrument
must be a bank, either a local or foreign bank. Section 185 of the
Negotiable Instrument Law defines a check as a bill of exchange on a
bank payable on demand. This means that the application of BP Blg. 22
always involves the participation of a bank as drawee of the check
and the law imposes a duty of what it should state in the notice of
dishonour.

In De Villa vs Court of Appeals, G.R. No. 87416, April 8, 1991 -


Petitioner argues that the check in question was drawn against the dollar
account of Petitioner with a foreign bank, and is therefore, not covered by
BP Blg. 22. The law does not distinguish the currency involved in the check.
Foreign checks though payable outside the Philippines are within the
coverage of BP Blg. 22 provided they are either drawn or issued in the
Philippines. The intention of the lawmakers is to apply the law to whatever
currency may be the subject thereof.
To whom should the check be paid?

The law did not mention to whom the check must be


payable to render the drawer liable for BP Blg. 22.
The payee of a check need not be the oblige of the
obligation in consideration for which the check has been
issued, as when the check is issued in favor of a person who
used it to pay his obligation to another person, to hold the
drawer liable for the dishonour of the check.
3rd Req.: The check is issued to apply on account or for value.

For value – means an obligation incurred simultaneously with the issuance of


the check.
For account – refers to pre-existing obligations

In Umali vs IAC, G.R. No. 63198, June 21, 1990 – What respondents
complained of in criminal case is that the checks issued by Petitioners in
their favor were dishonored for lack of funds upon due presentment to the
drawee bank. Undeniably, at the time of said dishonour, petitioner’s
obligations to pay private respondent pursuant to the deed of sale, continue
to subsist. And because petitioners check were dishonored for lack of
funds, petitioners are answerable under the law for the consequences of
their acts.. And even if the civil case was to be finally adjudged to the
effect that the said deed of sale should be annulled, such declaration would
be of no material importance in the determination of the guilt of innocence
of petitioners in criminal case.
However, if the contract is annulled by final judgment
prior to the dishonour of the check- such annulment is a valid
defense in BP Blg. 22. Since the contract is not anymore
binding to the parties, the check could not have said to have
been issued for valuable consideration.

A check is said to apply for account only when there is


still a pre-existing obligation. Thus, accused could not be held
liable for BP Blg. 22 if the pre-existing obligation has been
extinguished after full payment was made by him.
In Alonto vs People, G.R. No. 140078, Dec. 9, 2004- It was
held that with regard to the rule that BP Blg. 22 applies in
cases were dishnored checks are issued merely in the form of a
deposit or a guarantee. The law does not make distinction as to
whether the checks are within its contemplation are issued in
payment of an obligation or merely to guarantee the said obligation.
What are important are the facts that the accused had
deliberately issue the checks in question to cover accounts and
that the checks were dishonored upon presentment regardless
of whether or not the accused merely issued the checks as
guarantee.
Gravamen of BP BLG.22
The act of making and issuing a worthless check or one that is
dishonored upon its presentment for payment; and the accused failed
to satisfy the amount of the check or make arrangement for its
payment within five (5) banking days from notice of dishonour.
The act is malum prohibitum, a pernicious and inimical to
public welfare.
Why and to whom the check was issued is irrelevant in
determining culpability. The terms and conditions
surrounding the issuance of the checks are also irrelevant
SECOND ELEMENT: The accused knows at the time of the
issuance that he or she does not have sufficient funds in, or credit
with, the drawee bank for the payment of the check in full upon its
presentment.

Requisites:
1. The accused at the time of issuance of the check does not have
sufficient funds in, or credit with, the drawee bank for the
payment thereof in full upon its presentment; and
2. The accused knows such insufficiency.
1st Requisite:
If the check was funded at the time of the issuance, offender could
not be held liable for offense under 1st Par. of Section 1 of BP Blg. 22,
because the 2nd element is not present.
However, he could be held liable for offense under the 2nd Par. of
Section1 of BP Blg. 22 if he failed to maintain the sufficiency of fun within
90 days from its issuance and the check was dishonored by reason thereof.

2nd Requisite:
To hold a person liable under BP Blg. 22, it is not enough to
establish that a check issued was subsequently dishonored. It must be
shown further that the person who issued the check “knew” 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. However, since this requisite under the 2nd element
involves a state of mind, which is difficult to establish, Sec. 2 of the law
creates a prima facie presumption of knowledge of insufficient fund.
Prima facie knowledge of insufficiency of funds or credit, the
prosecution must show that:
1. The first and third elements of the Offense are present;
2. The check was presented within 90 days from the date of
maturity;
3. The offender received a notice of dishonour; and
4. Despite the lapse of five banking days after receiving the
notice, the check has not been paid by the drawee.

The offender received a notice of dishonour is an indispensable requisite. If the


complaint failed to send written notice of dishonour, presumption of
knowledge of insufficient fund will not arise, and the drawer will be deprived
of his right to aver criminal prosecution within five days from receipt of
written notice of dishonour. Thus, the accused is not criminally liable even if
there is evidence that he knew of such insufficiency. To rule otherwise is to
deprive him of procedural due process of law.
The full payment of the amount appearing in the check
within five banking days from notice of dishonour is a complete
defense.

How to dispute knowledge of insufficiency?


The drawer or makers must prove that:
1. He has no knowledge of insufficiency of funds or credit at the
time of issuance of the checks; and
2. At the time of issuance, the offender’s fund or credit are
sufficient to cover the check.

In Estafa, deceit is present if the prosecution establishes


that the “accused knew” that his checking account is already closed
at the time of the issuance of the check. On the other hand,
presence of deceit can be negated by the fact that the “complainant
knew” that the checking account of the accused is already closed
at the time of the issuance of the check; lack of deceit constitutes
a valid defense in estafa through bouncing checks.
In BP Blg. 22, knowledge of the payee that the drawer did not
have sufficient funds with the drawer did not have sufficient funds
with the drawee bank at the time the check was issued is immaterial as
deceit is not an essential element of the offense. This is because the
gravamen of the offense is the issuance of a bad check, hence, malice
and intent in the issuance thereof are inconsequential.
To be held liable of BP Blg. 22, the drawer must have
knowledge of insufficiency of funds or credit on the date appearing on
the check.
Knowledge as an element of violation of BP Blg. 22 is a
continuing eventuality. Although the law merely requires that offender
must have knowledge of insufficiency of funds at the time of issuance,
he must continuously possess such knowledge up to the time the check
was presented for payment. Thus, lack of knowledge of the
insufficiency of funds to cover the check at the time of its presentment
for payment with the drawee bank is a valid defense.
THIRD ELEMENT: That the 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.

Two requisites:
1. The check is presented for payment; and
2. The drawee bank dishonours the check for insufficiency of
funds or credit; or that the drawee bank would have
dishonored the check for insufficiency of funds or credit if the
offender without valid reason did not order the bank to stop
payment.

• The introduction in evidence of check with statement of


dishonour shall be prima facie evidence of the due
presentment thereof to the drawee for payment.
The fact that the check was presented beyond the 90-day period
provided in Sec. 2 of BP Blg. 22 is of no moment, as it is not an element
of the offense but merely a condition for the prima facie presumption
of knowledge of the insufficiency of fund.

To avoid incurring criminal liability, the drawer must maintain


sufficient funds or credit to cover the check upon presentment for
payment.

In Yu Oh vs Court of Appeals, G.R. No. 125297, June 6, 2003 – Petitioner’s


claim that cases of “closed accounts” are not included in the coverage of
BP Blg. 22 has no merit considering the clear intent of the law, which is
to discourage the issuance of worthless checks due to its harmful effect
to the public. His claim that “postdated checks” and cases of closed
accounts has no leg to stand on. The term “closed accounts” is within
the meaning of the phrase “does not have sufficient funds in or credit
with the drawee bank.”
B.P. Blg. 22 is broad enough to include within its coverage, the
making and issuing of a check by one who has no account with a bank,
or where such account was already closed when the check was
presented for payment (Ruiz vs People, G.R. No. 160893, Nov. 18, 2005).

In case there is STOP PAYMENT, the following requisites must be present


to establish the third element of this offense:
1. The offender order the bank to stop payment;
2. The offender had not valid reason to order the bank to stop
payment; and
3. The drawee bank would have dishonored the check for
insufficiency of funds or credit if there is no stop payment order.

Even though the funds of the drawer are insufficient to cover the
check, if there is valid reason to make a stop payment order, he is not
liable for violation of BP Blg. 22.
Ex. Mistake in naming the payee of the check.
Stop payment ordered in the exercise of right of suspension of payment
is a valid defense.
Ex. Countermanding the check is proper where payee failed to
deliver the goods that he was supposed to deliver.

In Lim vs CA, G.R. No. 107898, December 19, 1995 – The notice of
dishonour issue by the drawee bank, indicates not only that payment of
the check was stopped but also the reason for such order was that the
maker or drawer did not have sufficient funds with which to cover the
checks. Xxx Thus the third element is present.

In Tan vs People, G.R. No. 141466, January 19, 2001 – Check was
dishonored due to stop payment order. The bank representative
testified that petitioner’s account at the time of the presentment of the
check she issued was funded, as she had a credit line to the extent of
Php25 million, much more than the amount of the check issued.
Accused was acquitted of the crime of violation of BP Blg. 22.
ELEMENTS OF OFFENSE DEFINED IN PAR. 2, SEC. 1
(FAILURE TO MAINTAIN THE SUFFICIENCY OF FUND)

1. The making, drawing and issuance of any check to apply for


account or for value;
2. At the time of issue drawer have sufficient funds in or credit with
the drawee bank for the payment of such check in full upon its
presentment;
3. Drawer failed to keep sufficient funds or to maintain a credit to
cover the full amount of the check if presented within a period of
ninety days from the date appearing thereon; and
4. The subsequent dishonour of the check by the drawee bank for
insufficiency of funds or credit.
Situations under this act:
1. The drawer knows of the insufficiency of funds to cover the
check at the time of its issuance;
2. The drawer has sufficient funds at the time of issuance but
fails to keep sufficient funds or maintain credit within 90
days from the date appearing on the check.

In Bautista vs Court of Appeals, G.R. No. 143375, July 6, 2001 –


The check involved in the first offense is worthless at the time
of issuance since the drawer had neither sufficient funds in
nor credit with the drawee bank at the time, while that
involved in the second offense is good when issued as drawer
had sufficient funds in or credit with the drawee bank when
issued.
The 90 day period will commence to run on the “date
appearing on the check,” and not the date of delivery. Presentation
of the check within 90 days from date of maturity is an element.
Non-presentation thereof within the period is a defense.
NOTICE OF DISHONOR
Violation of BP Blg. 22 consummates upon the dishonour of the
check for insufficiency of funds or credit. Although it is not an
element of the crime, it is evidentiary indispensable to establish
beyond reasonable doubt that the accused received notice of
dishonour.
Absent of proof that the accused received written notice of
dishonour, a prosecution for violation of Anti-Bouncing Checks
Law cannot prosper on the following grounds:
1. Prevention of application of presumption – lack of written
notice of dishonour will prevent the application of
presumption of knowledge of insufficiency; and
2. Deprivation of right to avert prosecution – lack of written
notice of dishonour will deprive the accused of his right to
avert criminal prosecution, which is in effect a violation of
his right to due process.
In Yu Oh vs CA, G.R. No. 125297, June 6, 2003, the court held that, it is
essential for the maker or drawer to be notified of the dishonour of her
check, so she could pay the value thereof or make arrangements for its
payment within the period prescribed by law” and omission or neglect on
the part of the prosecution to prove that the accused received such notice
of dishonour is fatal to its cause.

Written notice of dishonour may be given either by


(1) personal delivery or
(2) by registered mail

Who may give written notice of dishonour to the drawer or maker?


1.The drawee bank
2.The holder of the check
3.The offended part
Requisites of Notice of Dishonor Rule

1. The notice of dishonour must be sent after the check was


dishonored by the drawee bank upon presentment for
payment;
2. The notice sent to the accused must convey the information
that the drawee bank dishonored the check;
3. The notice of dishonour must be in writing;
4. The accused received the notice of dishonour; and
5. The date of receipt of the notice of dishonour must be shown
The term “Notice of Dishonor” denotes that a check has
been presented for payment and was subsequently dishonored by
the drawee bank. This means that the check must necessarily due
and demandable because only a check that has become due can be
presented for payment and subsequently be dishonored. (Dico vs
Hon. Court of Appeals, G.R. No. 141669, February 28, 2005)
The notice of dishonour must be in writing. A verbal notice is not enough.
In Domagsang vs CA, G.R. No. 139292, December 5, 2000- Lack of written
notice of dishonour is fatal. While indeed Sec. 2 of BP Blg. 22 does not
state that the notice of dishonour be in wiritng, taken in conjunction,
however, with Sec. 3 of the law, i.e. “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 dishonour or refusal.” A mere oral
notice or demand to pay would appear to be insufficient for conviction
under the law. The court is convinced that both the spirit and letter of
the Bouncing Checks law would require for the act to be punished
thereunder not only that the accused issued a check that is dishonored,
but that likewise the accused has actually been notified in writing of
the fact of dishonour. The consistent rule is that penal statutes have to
be construed strictly against the State and liberally in favor of the
accused.”

In Estafa, oral notice of dishonour is enough to give rise to


presumption of deceit.
In BP Blg. 22, notice of dishonour must be in writing.
AVERTING CRIMINAL ACTION

The presumption of knowledge of insufficiency will not


arise if the maker or drawer pays the holder thereof the amount
due thereon, or makes arrangements for payment in full by the
drawee of such check within five (5) banking days after receiving
notice that such check has not been paid by the drawee. (Sec. 2,
BP Blg. 22)

Criminal Extinguishment
Payment or making arrangement for payment within five
days from receipt of written notice of dishonour is a mode of
extinguishing criminal liability. Applicable only to Par. 1, Sec.
1 of BP Blg. 22 and not Par. 2, Sec. 1.
PAYMENT- as a mode of extinguishing obligation consists in
the normal and voluntary fulfilment of obligation by realization
of purposes for which it was constituted. It is a mode of
extinguishing civil liability but is not a mode of extinction of
criminal liability under the RPC. However, offender can avert
criminal action for violation of BP Blg. 22 if payment is made
within five banking days from receipt of written notice of
dishonour.

Three (3) Requisites to avert criminal action for BP Blg. 22 through


payment:
1. The drawee pays the holder of the dishonored check;
2. The drawee pays the amount due thereon; and
3. The payment is made within five banking days from the
drawer’s receipt of written notice of dishonour.
In Macalalag, G.R. No. 164358, Dec. 20, 2006 – Only a full payment
of the face value of the check at the time of its presentment or
during the five-day grace period could exonerate accused from
criminal liability.

The full payment of the amount appearing in the check within


five banking days from notice of dishonour is a complete defense
regardless of the strength of the evidence offered by the
prosecution.

Payment beyond the grace period – Payment made after the


expiration of five (5) banking days from receipt of written notice
of dishonour is not a defense. Such payments can only affect
civil, but not criminal liability. Subsequent payment by the
accused would not obliterate the criminal liability theretofore
already incurred
ARRANGEMENT FOR PAYMENT – Payment of the value of
the check wither by the drawer or by the drawee bank within five
banking days from notice of the dishonour given to the drawer is
a complete defense.

Ex. Depositing money in the checking account of the offender to


fully cover the dishonored check within the grace period is a
defense. This will allow the holder to encash the dishonored
check. Second presentment for payment with the drawee bank
is allowed.

PERIOD OF PRESCRIPTION – Four years


PERSONS LIABLE UNDER THE LAW

1. The person or persons who actually signed the check.


Note: Only natural person can be held liable for the crim because of the
highly personal nature of the criminal responsibility.
2. Conspirator
3. Borrower – person who borrowed a check and signed it as a
drawer is liable.
Note: Ownership of the check is not material in the determination of
liability for Viol. Of BP Blg. 22.
PENALTY

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. (For the 1st and 2nd kind of Offense)

The courts are given the discretion to choose whether to


impose a single penalty or conjunctive penalties.
In Vaca vs CA, 359 Phil. 187, the Supreme Court deleted the prison
sentence imposed upon petitioners and instead ordered them only to
pay a fine equivalent to double the amount of the check. It was held
that: petitioners are first-time offenders. They are Filipino entrepreneurs
who presumably contribute to the national patrimony Apparently,
they brought this appeal, believing in all “good faith” although
mistakenly, that they had not committed a violation of BP Blg. 22.
Otherwise, they could simply have accepted the judgment of the trial
court and applied for probation to evade prison term. It would be best
serve the ends of criminal justice if in fixing the penalty within the
range of discretion allowed law, the same philosophy underlying the
Indeterminate Sentence Law is observed namely, that of redeeming
valuable human material and preventing unnecessary deprivation of
personal liberty and economic usefulness with due regard to the
protection of the social order.
In Lim vs People G.R. No. 130038, September 18, 2000, the
Supreme Court to serve the best the ends of criminal justice,
deleted the prison sentence imposed on petitioners and imposed
on them only a fine double the amount of the check issued. In
doing so, what was considered is the fact the petitioners brought
the appeal, believing in “goof faith” that no violation of BP Blg. 22
was committed, “otherwise, they could simply have accepted the
judgment of the trial court and applied for probation to evade prison
term. “
Adopting the principle in Vaca case and Lim case, the
Supreme Court issued Administrative Circular No. 12-2000, which
established a rule of preference in the application of the penal
provisions of BP Blg. 22 such that where the circumstances of
both the offense and offender clearly indicate good faith or a
clear mistake of fact without taint of negligence, the imposition
of fine alone rests solely upon the Judge. Should the Judge decide
that imprisonment is the more appropriate penalty, the circular
ought not be deemed a hindrance.
Administrative Circular No. 13-2001 modifies AC No. 12-2000 by
stressing that the clear tenor of AC No. 12-2000 is not to remove
imprisonment as an alternative penalty, but to lay down a rule of
preference in the application of penalties provided for in BP Blg. 22.

Administrative Circular No. 13-2001 provides: It is, therefore, understood


that:
1. Administrative Circular 12-2000 does not remove imprisonment as an
alternative penalty for violations of B.P. Blg. 22;
2. The Judges concerned may, in the exercise of sound discretion, and
taking into consideration the peculiar circumstances of each case,
determine whether the imposition of a fine alone would best serve
the interests of justice or whether forbearing to impose
imprisonment would depreciate the seriousness of the offense, work
violence on the social order, or otherwise be contrary to the
imperatives of justice;
3. Should only a fine be imposed and the accused be unable to pay the
fine, there is no legal obstacle to the application of the Revised Penal
Code provisions on subsidiary imprisonment.
Fine
• The penalty of fine for Violation of BP Blg. 22 has the minimum and
maximum limits. Its minimu limit is the face value of the check; its
maximum limit double the amount of check. However, the amount
of fine is subject to Php200,000.00 limitation rule.

Imprisonment
• The penalty for imprisonment for violation of BP Blg. 22 has
minimum and maximum limits. Its minimum limit is thirty (3)
days; its maximum one (1) year. The court must imposed a straight
penalty. The indeterminate sentence law is not applicable.

Subsidiary Imprisonment
• If the convict has no property with which to meet the penalty of
fine, he shall be subject to a subsidiary personal liability at the rate of
one day for eight pesos
Sec. 3 Duty of drawee; rules of evidence.

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:
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. 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.
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.
Duty of the Bank
It shall be the duty of the drawee bank 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 dishonour 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 dishonour or refusal.

Drawee bank may dishonour check presented for payment for the
following reasons:
1. Account closed;
2. No account;
3. Under garnishment;
4. Spurious check;
5. Unauthorized signature;
6. Documentary stamps missing (for foreign checks only);
Drawee bank may dishonour check presented for payment for the following
reasons:

7. Post-dated;
8. Stale-dated;
9. Validity restricted;
10. Miscleared item;
11. Deceased depositor;
12. Violation of clearing rules and/or procedures; and
13. Lost by presenting bank while in transit to clearing.

In case of Stop payment, the drawee bank must also indicate in


the return slip whether the check was drawn against uncollected deposit
(DAUD). Where the reason is “Account Closed,” it must be so
indicated.
Difference between Estafa and Violation of B.P. Blg. 22
ESTAFA B.P. BLG. 22
Mala in se Mala prohibita
Essentially crime against property Crime against public interest as it does
injury to the entire banking system
Deceit and damage are essential elements Deceit and damage is not required
to the crime
Mere issuance of check that dishonored Mere issuance of check that dishonored
does not gives rise to the presumption of gives rise to the presumption of
knowledge on the part of the drawer that knowledge on the part of the drawer that
he issued the same without sufficient he issued the same without sufficient
funds, hence, punishable funds, hence, punishable.
A drawer who issued of a dishonored A drawer of a dishonored check may be
check for a pre-existing obligation negates convicted even if he had issued the same
criminal liability. for a pre-existing obligation
The fact that the instrument is a This is not so in BP 22
memorandum check, guarantee check or
accommodation check is a defense
Lack of written notice of dishonour or Lack of written notice of dishonour or
payment made within five days from payment made within five days from
such notice is not a defense such notice is a defense
PRESIDENTIAL DECREE NO.
1689
INCREASING THE PENALTY FOR CERTAIN
FORMS OF SWINDLING OR ESTAFA
(April 6, 1980)
Section 1. Any person or persons who shall commit estafa or other
forms of swindling as defined in Article 315 and 316 of the Revised Penal
Code, as amended, shall be punished by life imprisonment to death if
the swindling (estafa) is committed by a syndicate consisting of five or
more persons formed with the intention of carrying out the unlawful or
illegal act, transaction, enterprise or scheme, and the defraudation
results in the misappropriation of money contributed by stockholders,
or members of rural banks, cooperative, "samahang nayon(s)", or
farmers association, or of funds solicited by corporations/associations
from the general public.

When not committed by a syndicate as above defined, the penalty


imposable shall be reclusion temporal to reclusion perpetua if the
amount of the fraud exceeds 100,000 pesos.
Under PD 1689, the ELEMENTS OF SYNDICATED ESTAFA
are as follows:

1. Estafa or other forms of swindling as defined in Article 315


and 316 of the Revised Penal Code is committed;
2. That degradation results in the misappropriation of moneys
contributed by stockholders, or members of rural banks,
cooperatives, “samahang nayon(s)”, or farmer associations, or
of funds solicited by corporations/associations from the
general public;
3. The estafa or swindling is committed by a syndicate
FIRST ELEMENT - Estafa or other forms of swindling as defined in
Article 315 and 316 of the Revised Penal Code is committed;

Elements of Estafa in general:


1. The accused defrauded another by abuse of confidence, or by
means of deceit; and
2. Damage or prejudice capable of pecuniary estimation is caused
to the offended party or third person.
SECOND ELEMENT - That degradation results in the
misappropriation of moneys contributed by stockholders, or members of
rural banks, cooperatives, “samahang nayon(s)”, or farmer

The act prohibited in PD No. 1689 need not necessarily


threaten the stability of the nation. It is sufficient that it
“contravenes public interest.” Public interest was affected by
the solicitation of deposits under a promise of substantial
profits, as it was people coming from the lower income
brackets who were victimized by the illegal scheme.
PD No. 1689 applies not only applies to rural banks,
cooperative, samahang nayon or famer’s association but also to
other corporations/associations operating on funds solicited
from the general public.
In People vs Romero, G.R. No. 112985, April 21, 1999 – Appellants
corporation was engaged in soliciting funds and investments from the
public. The corporation guaranteed an 800% return on investment
within fifteen (15) or twenty-one (21) days. Complainant invested his
money with the corporation in the amount of Php150,000.00. Check
issued to complainant representing return of investment bounced. The
factual narration in this case established a kind of Ponzi scheme. This is
an investment swindle in which high profits are promised from
fictitious sources and early investors are paid off with funds raised from
latter ones.” It is sometimes called a pyramid scheme because of a
broader base of gullible investors must support the structure as time
passes. In this case, the appellants were convicted of Estafa under P.D.
1689.

Ponzi Scheme – early investors are being paid to fraudulently induce


others to invest their money therein. .
THIRD ELEMENT - The estafa or swindling is committed by a
syndicate

Syndicate –as defined under PD No. 1689 as “consisting of five or


more persons formed with the intention of carrying out the
unlawful or illegal act, transaction, enterprise or scheme.
PENALTIES

1. If committed by a syndicate: by life imprisonment to death


2. If offenders are not members of a syndicate and the amount of
the fraud is more than one hundred thousand pesos
(Php100,000.00): Reclusion temporal to Reclusion perpetua if
the amount of the fraud is more than one hundred thousand
pesos (Php100,000.00);
3. If offenders are not members of a syndicate and the amount of
the fraud is not more than one hundred thousand pesos
(Php100,000.00): PD 1689 is not applicable. Accused can be
only be convicted under the RPC.
THANK YOU!