Batas Pambansa Blg.

22~Bouncing Checks Law: Annotated

BATAS PAMBANSA BLG. 22: ANNOTATED

This is an annotation of Batas Pambansa Blg. (“BP”) 22 — “An

Act 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 distinct

acts (Bautista vs. Court of Appeals, G.R. No. 143375,

6 July 2001):

(1) Making or drawing and issuing any check to apply

on account or for value, knowing at the time of issue

that the drawer does not have sufficient funds in or

credit with the drawee bank.

(2) Having sufficient funds in or credit with the

drawee bank 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.

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 funds

at the time of issuance but fails to keep sufficient funds or

maintain credit within ninety (90) days from the date appearing

on 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 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. 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 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, 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 clarified

that the earlier circular, Administrative Circular 12-2000, did not

remove imprisonment as an alternative penalty for violations

of B.P. Blg. 22. The Judges 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.” Also, “[s]hould 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.”

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 shown

beyond reasonable doubt that the accused knew of the

insufficiency of funds at the time the check was issued.

Section 2 provides that the accused must be notified of the

dishonor.

The prosecution must establish that the accused was actually

notified that the check was dishonored, and that he or she

failed, within five banking days from receipt of the notice, to

pay the holder of the check the amount due thereon or to make

arrangement for its payment. 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.

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 of

dishonor or refusal.”This is consistent with the rule that penal

statutes have to be construed strictly against the State and

liberally in favor of the accused. Without a written notice of

dishonor of the checks, there is no way of determining

when the 5-day period prescribed in Section 2 would start

and 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 a

check is issued. But the law also provides that the presumption

does not arise when the issuer pays the amount of the check

or makes arrangement for its payment “within five banking days

after receiving notice that such check has not been paid by

the drawee.” Verily, BP 22 gives the accused an opportunity to

satisfy the amount indicated in the check and thus avert

prosecution.(King vs. People, G.R. No. 131540, 2 December 1999)

The foregoing discussion abundantly shows that the notice

must 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 fact

in 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 the

assurance that she will inform petitioner that the

checks were dishonored.

It is clear from these findings that there was no

written notice given to the accused. It is also clear

that no notice, even a verbal notice, was given

directly to the accused. Still, the Supreme Court

concluded that:

We likewise find no reason to sustain petitioner’s

contention that she was not given any notice of

dishonor. Myrna had no reason to be suspicious

of petitioner. It will be recalled that Josefina

Dimalanta assured Myrna that petitioner is her

“best friend” and “a good payer.” Consequently,

when the checks bounced, Myrna would naturally

turn to Josefina for help. We note that Josefina

refused to give Myrna petitioner’s address but

promised to inform petitioner about the dishonored

checks.

This ruling would appear to be inconsistent with

the required burden of proof and the rule of

interpretation of penal laws, succinctly noted in

King vs. People, thus:

We must stress that BP 22, like all penal

statutes, is construed strictly against

the State and liberally in favor of the

accused. Likewise, the prosecution has

the burden to prove beyond reasonable

doubt 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 or

even 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 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.” For

instance, in the case of King vs. People (supra), the prosecution

presented 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 the

Revised 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 in

Lozano vs. Martinez (G.R. No. L-63419, 18 December 1986),

are the following: (1) it offends the constitutional provision

forbidding imprisonment for debt; (2) it impairs freedom of

contract; (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 passage

the Interim Batasan violated the constitutional provision

prohibiting amendments to a bill on Third Reading. Unless

otherwise indicated, the succeeding discussions are lifted

from Lozano.

Non-imprisonment for debt

It had been argued that BP 22 runs counter to the inhibition

in 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 the

act of making and issuing a worthless check or a check that

is 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 in

circulation. Because of its deleterious effects on the public

interest, 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 lawmaking

body to proscribe certain acts deemed pernicious and inimical

to 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 legislature

that, as a matter of public policy, the making and issuance

of a worthless check is deemed public nuisance to be abated

by the imposition of penal sanctions. It had been reported that

the approximate value of bouncing checks per day was close

to 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 exists

between 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 prompted

its 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 constitutionally

protected is freedom to enter into “lawful” contracts. Contracts

which contravene public policy are not lawful. Checks can not

be categorized as mere contracts. It is a commercial instrument

which, in this modem day and age, has become a convenient

substitute for money; it forms part of the banking system and

therefore 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 both

the 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 text

of the second paragraph of Section 1 of the bill as adopted

on Second Reading was altered or changed in the printed text

of the bill submitted for approval on Third Reading. However,

it is clear from the records that the text of the second

paragraph of Section 1 of BP 22 is the text which was actually

approved 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 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.