ATAS PAMBANSA BLG. 22: ANNOTATED

This is an annotation of Batas Pambansa Blg. ("BP") 22 --  "AnAct Penalizing the Making or Drawing and Issuance of a Check Without Sufficient Funds or Credit and for Other Purposes"(See also: Full text of BP 22; Forum Discussion).

BP 22, often referred to as the "Bouncing Checks Law," governs the criminal liability arising from the issuance of bounced checks. What the law punishes is the issuance of a bouncing check and not the purpose for which the check was issued, nor the terms and conditions of its issuance. To determine the reasons for which checks are issued, or the terms and conditions for their issuance, will greatly erode the faith the public reposes in the stability and commercial value of checks as currency substitutes, and bring about havoc in trade and in banking communities. (Caras vs. Court of Appeals, G.R. No. 129900, 2 October 2001)

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.

Annotation:

Section 1 of the Bouncing Checks Law penalizes two distinctacts (Bautista vs. Court of Appeals, G.R. No. 143375,6 July 2001):

(1) Making or drawing and issuing any check to applyon account or for value, knowing at the time of issuethat the drawer does not have sufficient funds in orcredit with the drawee bank. 

(2) Having sufficient funds in or credit with thedrawee bank shall fail to keep sufficient funds or tomaintain a credit to cover the full amount of thecheck if presented within a period of 90 days fromthe date appearing thereon, for which reason it isdishonored by the drawee bank.

In the first paragraph, the drawer knows that he does not have sufficient funds to cover the check at the time of its issuance,while in the second paragraph, the drawer has sufficient fundsat the time of issuance but fails to keep sufficient funds or maintain credit within ninety (90) days from the date appearingon the check. In both instances, the offense is consummated by the dishonor of the check for insufficiency of funds or credit.

The check involved in the first offense is worthless at the time of issuance since the drawer had neither sufficient funds innor credit with the drawee bank at the time, while thatinvolved in the second offense is good when issued as drawerhad sufficient funds in or credit with the drawee bank whenissued. Under the first offense, the 90-day presentment period is not expressly provided, while such period is an express element of the second offense.

Elements: General

The elements of the offense under Section 1 of B.P. Blg. 22 are:

(1) drawing and issuance of any check to apply onaccount or for value;

(2) knowledge by the maker, drawer, or issuer thatat the time of issue he did not have sufficientfunds in or credit with the drawee bank for thepayment of such check in full upon presentment;and(3) said check is subsequently dishonored by thedrawee bank for insufficiency of funds or credit, or would have been dishonored for the samereason had not the drawer, without any valid reason,ordered the bank to stop payment.(Caras vs. Court of Appeals, supra.)

The second requisite or element is discussed in Section 2 below, while the third requisite is discused in Section 3.

Applicable penalties

In A.M. No. 00-11-01-SC (2001), the Supreme Court clarifiedthat the earlier circular, Administrative Circular 12-2000, did notremove imprisonment as an alternative penalty for violationsof B.P. Blg. 22. The Judges may, "in the exercise of sounddiscretion, and taking into consideration the peculiarcircumstances of each case, determine whether theimposition 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." Also, "[s]hould only a fine be imposed and the accused be unable to pay the fine, there is no legalobstacle to the application of the Revised Penal Codeprovisions on subsidiary imprisonment."

SEC. 2. Evidence of knowledge of insufficient funds. – The making, drawing and issuance of a check payment of which is refused by the drawee bank because of insufficient funds in or credit with such bank, when presented within ninety (90) days from the date of the check, shall be prima facie evidence of knowledge of such insufficiency of funds or credit, unless such 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.

Annotation:

The second element of the offense is the knowledge of the accused about the insufficiency of funds. It must be shownbeyond reasonable doubt that the accused knew of theinsufficiency of funds at the time the check was issued.Section 2 provides that the accused must be notified of thedishonor.

The prosecution must establish that the accused was actually notified that the check was dishonored, and that he or shefailed, within five banking days from receipt of the notice, topay the holder of the check the amount due thereon or to make arrangement for its payment. The notice of dishonor of a checkto the maker must be in writing. A mere oral notice to thedrawer or maker of the dishonor of his check is not enough.It's true that Section 2 does not state that the notice of dishonor be in writing. This, however, should be taken in conjunction with Section 3, which provides “that where there are no sufficient funds in or credit with such drawee bank, such fact shall always be explicitly stated in the notice ofdishonor or refusal.”This is consistent with the rule that penalstatutes have to be construed strictly against the State andliberally in favor of the accused. Without a written notice ofdishonor of the checks, there is no way of determining when the 5-day period prescribed in Section 2 would startand end. (Bax vs. People, G.R. No. 149858, 5 September 2007,citing Rico vs. People, G.R. No. 137191, 18 November 2002,392 SCRA 61)

In other words, the prima facie presumption arises when acheck is issued. But the law also provides that the presumptiondoes not arise when the issuer pays the amount of the checkor makes arrangement for its payment "within five banking daysafter receiving notice that such check has not been paid bythe drawee." Verily, BP 22 gives the accused an opportunity tosatisfy the amount indicated in the check and thus avertprosecution.(King vs. People, G.R. No. 131540, 2 December 1999)

The foregoing discussion abundantly shows that the noticemust be in writing. A verbal and indirect notice, however,was found to be sufficient in the case of Yulo vs. People,G.R. No. 142762, 4 March 2005. The pertinent finding of factin this case is as follows:

As Myrna [the complainant] did not know

petitioner’s [the accused] address, she immediately informed Josefina [the "best friend of the accused] about the dishonored checks. The latter told Myrna not to worry and repeated her assurance that petitioner is her best friend and a good payer.Myrna tried to get petitioner’s address from Josefina,but the latter refused and instead made theassurance that she will inform petitioner that thechecks were dishonored.

It is clear from these findings that there was nowritten notice given to the accused. It is also clearthat no notice, even a verbal notice, was givendirectly to the accused. Still, the Supreme Courtconcluded that:

We likewise find no reason to sustain petitioner’scontention that she was not given any notice of dishonor. Myrna had no reason to be suspicious of petitioner. It will be recalled that JosefinaDimalanta assured Myrna that petitioner is her"best friend" and "a good payer." Consequently, when the checks bounced, Myrna would naturallyturn to Josefina for help. We note that Josefinarefused to give Myrna petitioner’s address butpromised to inform petitioner about the dishonoredchecks.

This ruling would appear to be inconsistent with the required burden of proof and the rule of interpretation of penal laws, succinctly noted inKing vs. People, thus:

We must stress that BP 22, like all penalstatutes, is construed strictly againstthe State and liberally in favor of theaccused. Likewise, the prosecution hasthe burden to prove beyond reasonabledoubt each element of the crime. Hence,the prosecution’s case must rise or fall on the strength of its own evidence, never on the weakness oreven absence of that of the defense.

Section 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

Not with standing 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.

Annotation:

The third element of the offense is the dishonor of the check.Under Section 3, "the introduction in evidence of any unpaid anddishonored check, having the drawee’s refusal to pay stamped orwritten thereon, or attached thereto, with the reason thereforas aforesaid, shall be prima facie evidence of the making orissuance of said check, and the due presentment to the draweefor payment and the dishonor thereof, and that the same wasproperly dishonored for the reason written, stamped, or attached by the drawee on such dishonored check." Forinstance, in the case of King vs. People (supra), the prosecutionpresented the checks which were stamped with the words “ACCOUNT CLOSED,” supported by the returned check tickets issued by the depository bank stating that the checks had been dishonored. The documents constitute prima facie evidence that the drawee bank dishonored the checks, and no no evidence was presented to rebut the claim.

Section 4. Credit construed. - The word "credit" as used herein shall be construed to mean an arrangement or understanding with the bank for the payment of such check.

Section 5. Liability under the Revised Penal Code. - Prosecution under this Act shall be without prejudice to any liability for violation of any provision of the Revised Penal Code.Annotation:

The act of issuing a bouncing check could give rise to separate offenses punishable under BP 22 and simultaneously under theRevised Penal Code.

Section 6. Separability clause. - If any separable provision of this Act be declared unconstitutional, the remaining provisions shall continue to be in force.

Annotation:

The attacks on the constitutionality of BP 22, as discussed inLozano vs. Martinez (G.R. No. L-63419, 18 December 1986),are the following: (1) it offends the constitutional provisionforbidding imprisonment for debt; (2) it impairs freedom ofcontract; (3) it contravenes the equal protection clause;(4) it unduly delegates legislative and executive powers;and (5) its enactment is flawed in that during its passagethe Interim Batasan violated the constitutional provisionprohibiting amendments to a bill on Third Reading. Unlessotherwise indicated, the succeeding discussions are liftedfrom Lozano.

Non-imprisonment for debt

It had been argued that BP 22 runs counter to the inhibitionin the Bill of Rights which states, "No person shall be imprisoned for debt or non-payment of a poll tax." Since the offense under BP 22 is consummated only upon the dishonor or non-payment of the check when it is presented to the drawee bank, the statute is really a "bad debt law" rather than a "bad check law." What it punishes is the non-payment of the check, not the act of issuing it. The statute, it is claimed, is nothing more than a veiled device to coerce payment of a debt under the threat of penal sanction.

The gravamen of the offense punished by BP 22 is theact of making and issuing a worthless check or a check thatis dishonored upon its presentation for payment. It is not the 

non-payment of an obligation which the law punishes. The law is not intended or designed to coerce a debtor to pay his debt. The thrust of the law is to prohibit, under pain of penal sanctions, the making of worthless checks and putting them incirculation. Because of its deleterious effects on the publicinterest, the practice is proscribed by the law. The law punishes the act not as an offense against property, but an offense against public order.

It may be constitutionally impermissible for the legislature to penalize a person for non-payment of a debt ex contractu. But certainly it is within the prerogative of the lawmakingbody to proscribe certain acts deemed pernicious and inimicalto public welfare. Acts mala in se are not the only acts which the law can punish. An act may not be considered by society as inherently wrong, hence, not malum in se but because of the harm that it inflicts on the community, it can be outlawed and criminally punished as malum prohibitum. The state can do this in the exercise of its police power.

The enactment of BP 22 is a declaration by the legislaturethat, as a matter of public policy, the making and issuance of a worthless check is deemed public nuisance to be abatedby the imposition of penal sanctions. It had been reported thatthe approximate value of bouncing checks per day was closeto 200 million pesos.

It is not for the court to question the wisdom or policy of the statute. It is sufficient that a reasonable nexus existsbetween means and end. Considering the factual and legal antecedents that led to the adoption of the statute, it is not difficult to understand the public concern which promptedits enactment.

Impairment of freedom of contract

Article III, Section 10 of the Constitution provides that: "No law impairing the obligation of contracts shall be passed." However, the freedom of contract which is constitutionallyprotected is freedom to enter into "lawful" contracts. Contractswhich contravene public policy are not lawful. Checks can notbe categorized as mere contracts. It is a commercial instrumentwhich, in this modem day and age, has become a convenientsubstitute for money; it forms part of the banking system andtherefore not entirely free from the regulatory power of the state.

Equal protection of the laws

The challenge is to the effect that BP 22 is discriminatory or is violative of the equal protection of the laws since it penalizes the drawer of the check, but not the payee. It had been argued that the payee is just as responsible for the crime as the drawer of the check, since without the indispensable participation of the payee by his acceptance of the check there would be no crime. It is settled, however, that the clause "equal protection of the laws" does not preclude classification of individuals, who may be accorded different treatment under the law as long as the classification is no unreasonable or arbitrary. The argument premised on the equal protection of the law is tantamount to saying that, to give equal protection, the law should punish boththe swindler and the swindled.

Improper delegation of legislative powers

It had been argued that the law violates the Constitutional prohibition against the delegation of legislative power, on the theory that the offense is not completed by the sole act of the maker or drawer but is made to depend on the will of the payee -- if the payee does not present the check to the bank for payment but instead keeps it, there would be no crime. This argument, however, stretches to absurdity the meaning of "delegation of legislative power." What cannot be delegated is the power to legislate, or the power to make laws. which means,as applied to the present case, the power to define the offense sought to be punished and to prescribe the penalty. By no stretch of logic or imagination can it be said that the power to define the crime and prescribe the penalty therefor has been in any manner delegated to the payee. Neither is there any provision in the statute that can be construed, no matter how remotely, as undue delegation of executive power.

Defect in the enactment of BP 22

It is argued that Section 9 (2) of Article VII of the 1973 Constitution was violated by the legislative body when it enacted BP 22 into law. This constitutional provision prohibits the introduction of amendments to a bill during the Third Reading. It is claimed that during its Third Reading, the bill which eventually became BP 22 was amended in that the textof the second paragraph of Section 1 of the bill as adopted

on Second Reading was altered or changed in the printed textof the bill submitted for approval on Third Reading. However,it is clear from the records that the text of the secondparagraph of Section 1 of BP 22 is the text which was actuallyapproved by the body on Second Reading. 

Section 7. Effectivity. - This Act shall take effect fifteen days after publication in the Official Gazette. evidence of the making or issuance of said check, and the due presentment to thedrawee for payment and the dishonor thereof, and that the same was properly dishonored for the reason written, stampedor attached by the drawee on such dishonored check.Copyright © 2009 Jaromay Pamaos Law Office. All Rights Reserved.