Dear PAO,

I received a demand letter from my creditor to pay the amount corresponding to the postdated checks I issued, which were
dishonored because of insufficient funds. Before receipt of the demand letter, I was willing to settle my obligations but my
creditor and I had a misunderstanding regarding the manner of payment of my debt. In the end, she said that she would just
see me in court as she did not agree to any settlement anymore.
I admit to be a bit angry because of her inconsideration. Then, I received a demand letter asking me to pay all my debts
otherwise she will file a case for estafa and threatens me of imprisonment for 20 years. I believe that the case will be
dismissed because I know that no person can be imprisoned for non-payment of debt. Please clarify!
Josie
Dear Josie,
Our Constitution has declared under Section 20, Article III thereof that no person shall be imprisoned for debt or non-
payment of poll tax. Although a person who is indebted cannot be punished by imprisonment, he may nevertheless be sued
civilly for collection of sum of money, wherein the court shall order payment of debt. However, when the act of borrowing of
money is accompanied with an act which is punishable by law with imprisonment or penalty, the debtor may be criminally
liable not for the non-payment of debt but for the commission of the crime. As in your case, borrowing, alone, of money will
not make you criminally liable. But your issuance of postdated checks which were later dishonored for insufficiency of
funds constitutes a crime of either violation of Batas Pambansa Blg. 22 (B.P. 22) or Estafa.
BP 22, commonly referred to as Bouncing Checks Law, punishes any person who makes or draws and issues any checks
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 upon its presentment. On the other hand, the maker or issuer may likewise be
liable for estafa punishable under Article 315 of the Revised Penal Code if he issues a check for payment of an obligation
using false pretense or fraudulent act.
Thus, your creditor may pursue either a criminal case for violation of B.P. 22 and/or estafa against you depending on the
events surrounding your issuance of postdated checks. The penalty of twenty (20) years for the issuance of unfunded check
is not a threat for you to pay in full the amount of the checks. The said imprisonment is the maximum penalty which can be
imposed upon an accused in an estafa case under Article 315 of the Revised Penal Code, which states that the penalty of
prision correccional in its maximum period to prision mayor in its minimum period, if the amount of the fraud is over 12,000
pesos but does not exceed 22,000 pesos, and if such amount exceeds the latter sum, the penalty provided in this
paragraph shall be imposed in its maximum period, adding one year for each additional 10,000 pesos; but the total penalty
which may be imposed shall not exceed twenty years.
Please be reminded that the above legal opinion is solely based on our appreciation of the problem that you have stated.
The opinion may vary when other facts are stated.
_________
Filing a criminal complaint
When a cheque bounces the first time, the bank issues a 'cheque return memo', stating the reasons for non-payment. The
holder can resubmit the cheque to the bank within three months of the date on it, if he believes it will be honoured the
second time.
The other option would be to prosecute the defaulter legally. The first step is to send a legal notice to the defaulter within 30
days of receiving the cheque return memo. All the relevant facts of the case, including the nature of transaction, amount,
date of depositing the instrument in the bank, and subsequent date of dishonouring, should be clearly mentioned in the
notice. If the cheque issuer fails to make a fresh payment within 30 days of receiving the notice, the payee has the right to
file a criminal complaint under Section 138 of the Negotiable Instruments Act. However, the complaint should be registered
in a magistrate's court within a month of the expiry of the notice period.
If you fail to file the complaint within this period, your suit will become time-barred and, hence, not be entertained by the
court unless you show sufficient and reasonable cause for the delay. On receiving the complaint, along with an affidavit and
relevant paper trail, the court will issue summons and hear the matter. If found guilty, the defaulter can be punished with a
prison term of two years and/or a fine, which can be as high as twice the cheque amount.
However, the defaulter can appeal to the sessions court within one month of the date of judgement of the lower court. If a
prolonged court battle is not acceptable to both the parties, an out-of-court settlement can be attempted at any point. "You
can also file a case of cheating under Section 420 of the Indian Penal Code, but the above recourse is preferred as it is
faster and specially dedicated to this particular offence (bounced cheques)," says Ravi Goenka, advocate, Goenka Law
Associates.
Filing a civil suit
While the above-mentioned process is helpful in taking a defaulter to task, it may not always result in recovery of the
pending dues. Hence, one can file a separate civil suit for recovery of the cheque amount, along with the cost borne and the
lost interest.
_________
Question of Law
Wednesday, May 22, 2013

LAST week we discussed the Anti-Bouncing Checks Law (Batas Pambansa Bilang 22), as well as its main thrust and how it
imposes criminal liability on the issuance of a bouncing check.
This week, let us discuss, briefly, the elements of a violation of Sec. 1 of B.P. 22.
The Supreme Court has held that the following are the elements for a bouncing check violation under B.P. 22:
The elements of the offense under Section 1 of B.P. Blg. 22 are:
(1) drawing and issuance of any check to apply on account or for value;
(2) knowledge by the maker, drawer, or issuer that at the time of issue he did not have sufficient funds in or credit with the
drawee bank for the payment of such check in full upon presentment; and
(3) said 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. (Caras vs. Court of Appeals, G.R. No. 129900, 2 October 2001)
Thus, one has to prove three things for a violation of B.P. 22. First, one has to show and prove that there was the drawing
and issuance of a check to apply on account or for value.
Second, that the one who issued, made or drew the check knew at the time of issue that there was insufficient funds in the
bank for the payment of the check upon its presentment.
Third, that the check is subsequently dishonored by the bank for insufficiency of funds, or would have been dishonored if the
bank was subjected to a stop payment order of the check by its drawer, maker, or issuer.
The first and last elements are easy to prove because the mere existence of a bounced check is sufficient evidence. It is the
second element where most cases on B.P. 22 hinge on, as it is difficult to prove that the one who issued the bouncing check
knew there were insufficient funds in the bank for payment.
As such, Section 2 of B.P. 22 provides as follows:
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.
(Underscoring supplied).
Under Section 2, it is presumed that a check which is refused payment by the bank is evidence of knowledge of
insufficiency of funds or credit. However, it is required that there is a notice of dishonor made upon the one who issued the
check. In other words, Section 2 provides that there must be written notification of the dishonor made to the issuer of the
check. The notice of dishonor should then inform the issuer that he has five days to make good the amount of the check.
It must be noted that the notice of dishonor of a check to the maker must be in writing. A mere oral notice to the drawer or
maker of the dishonor of his check is not enough. (Bax vs. People, G.R. No. 149858, 5 September 2007). From that then,
one can determine the existence of the 2nd element of a B.P. 22 violation.
Thus, once all the elements of B.P. 22 or bouncing checks are present, such as those explained above, the issuer of the
check can now be prosecuted under the Anti-Bouncing Checks Law before the Office of the Prosecutor.
Once again, the reminder is clear: be careful when you issue your checks. Make sure your checking account has enough
money to cover the amounts of the checks. Otherwise, you may find yourself facing a bouncing checks case

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BP 22 or estafa
In commercial transactions, checks play a significant factor in the conduct of trade and business. Apart from ease and
convenience of doing business, checks also facilitate a highly effective and efficient system of commerce.
Checks have long been used in business as early as 9th century. However, it was during the 20th century where checks
gained its popularity as a form of non-cash payment scheme.
With the popularity of checks, however, came also a plethora of problems that attend commercial and trading systems. The
issuance of unfunded checks by unscrupulous individuals brought serious repercussions to the market and the economy, in
general. The Revised Penal Code, at one time, had been sufficient to address cases involving the issuance of unfunded
checks. But the increasing ability of men to get around with the law rendered the Revised Penal Code unable to cope with
the exigencies of business transactions. Thus the passage of B.P. 22 or the Bouncing Checks Law.
Everyday, we heard a lot of stories about Estafa and Bouncing Checks. For lawyers and law students, distinguishing the two
is just a walk in the park. For laymen, a measure of confusion is not unheard of.
Estafa Through Issuance of Unfunded Checks
The crime of Estafa is punished under the Revised Penal Code. One can be held guilty for Estafa by means of issuing a
bouncing check with the use of false pretenses or fraudulent acts executed prior to or simultaneously with the commission
of the fraud:
By postdating a check, or issuing a check in payment of an obligation when the offender had no funds in the bank, or his
funds deposited therein were not sufficient to cover the amount of the check. (Article 315(2)(d) of the Revised Penal Code
as amended by R.A. 4885)
Requirements for a Person to Be Held Guilty for Estafa
1. Postdating or issuance of a check in payment of an obligation contracted at the time the check was issued
2. Insufficiency of funds to cover the check, and
3. Damage to the payee thereof.
If any of these is absent, a person cannot be held liable for Estafa.
Example:
A bought goods from B and issued an unfunded check in consideration of the goods received.
In the problem above, A can be charged for Estafa because he issued a check knowing it to be without sufficient funds to
pay the goods he bought from B. The issuance of the bounced check here was with fraudulent intent.
Bouncing Checks Law (BP 22)
A person can be charged for violation of BP 22 when he commits the following acts:
1. 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 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;
2. 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.
Requirements for a Person to Be Held Guilty for Violation of BP 22
Violation of BP 22 can be filed against any person when the following are present:
1. Making, drawing and issuance of any check to apply for account or for value;
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 such check in full upon its presentment; and
3. Subsequent dishonor of the check by the drawee bank for insufficiency of funds or credit or dishonor for the same reason
had not the drawer, without any valid cause, ordered the bank to stop payment.
Again, the presence of all these requirements is important. Otherwise, no BP 22 case can be filed. Note that knowledge of
insufficiency of funds is presumed when t is proved that the issuer received a notice of dishonor and that within 5 days from
receipt thereof, he failed to pay the amount of the check or make arrangement for its payment. Additionally, in BP 22, it is
not a defense that upon the issuance of check you are not motivated with malice or fraudulent intent.
Adopting our example above, it would appear then that A can also be charged for Violation of BP 22, apart from the estafa
case, because BP 22 cases also cover issuances of bouncing checks for value received right there and then.
So What is the Difference Between the Two?
It is Estafa when, among others, you issue an unfunded check with fraudulent intent in consideration of something of value
you received.
It is a case for Violation of BP 22 when you issue an unfunded check whether or not it is for an obligation you contracted
prior to the issuance of the check or not. Otherwise stated, you are liable for BP 22 whether you issue a check for a present
or a past obligation.