TABLE OF CONTENTS

Rationale

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1 2 3 5 6 6 7 8 9 26 30 34

Acts punished

Section 1, BP 22 Penalties Imposed

Review of the Related Literature

BP 22 . (a) BP 22 vs. Estafa . SC Circulars .. SC Decisions .. Opinions . ..

Recommendations Appendixes

I.

Rationale Long ago, the Judiciary, together with the Legislature, has observed that the latter was being made collectors of lenders thereby clogging the courts. As a solution to that, Batas Pambansa Blg. 22 (BP22) otherwise, the Bouncing Checks Law was coined and later on, implemented. (see appendix A) BP 22 is a law that encompasses the criminal liability arising from the issuance of bounced checks. Gravamen of the same is the issuance of a check, not the nonpayment of an obligation. (Lozano vs. Martinez, 146 SCRA 323) The law has made mere act of issuing a bum check a malum prohibitum. (People vs. Laggui, 171 SCRA 305; People vs. Manzanilla, 156 SCRA 279) The same does not make a distinction as to whether the bad check is issued in payment of an obligation or to merely guarantee an obligation. (Que vs. People, 154 SCRA 16) Therefore, 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.

II.

Acts Punished The sovereign people have been given a constitutional inhibition against imprisonment for debt as stated in Sec. 20 of the Bill of Rights (Art. III) No person shall be imprisoned for debt or nonpayment of a poll tax.

The question now is, has BP22 transgressed this provision? NO. BP22 has violated such because what is punished by the same is the criminal action of contracting a mans debt through fraud. In the Lozano Case, Justice Yap declared: 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 nonpayment 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. The issuer is not automatically liable simply because the check bounced. A check generally bounces when dishonored upon presentment (reasons include, account closed, drawn against insufficient funds or DAIF). However, it is indispensable that the issuer must be notified in WRITING about the fact of dishonor, and he has 5 days from receipt to pay the value of the check or make arrangements for the payment

4 thereof. This is based on the 1999 decision of the Supreme Court in King vs. People of the Philippines (G.R. No. 131540). Section 1. Checks Without Sufficient Funds. Offenses punished under BP 22: 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 credit with the drawee bank for 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. Elements: a. b. That a person makes or draws and issues any check. That the check is made or drawn and issued to apply on account or for value. c. That the person who makes or draws and issues the check knows

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. d. 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. 2. Having sufficient funds in or credit with the drawee bank when he makes or draws and issue a check, by failing to keep sufficient funds or maintain a

5 credit to cover the full amount of 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: a. That the person has sufficient funds in or credit with the drawee

bank when he makes or draws and issues a check. b. That he fails to keep sufficient funds or maintain a credit to cover

the full amount of the check if presented within a period of 90 days from the date appearing thereon. c. That the check is dishonored by the drawee bank.

III.

Penalties Imposed Section 1 of BP 22 imposes the penalty of imprisonment of not less than thirty (30) days but not more than one (1) year OR a fine of not less than but not more than double the amount of the check, which shall in no case exceed P200, 000, OR both such fine and imprisonment at the discretion of the court. Supreme Court Administrative Circular No. 13-2001 issued on February 14, 2001 clarified that the clear tenor and intention of Administrative Circular No. 12-2000 is not to remove the imprisonment as an alternative penalty, but to law down a rule of preference in the application of the penalties provided for BP 22. (see appendix B and C) Administrative Circular No. 13-2001 further clarified that Administrative Circular No. 12-2000 establishes a rule of preference in the application of the penal provision of BP 22 such that where the circumstances of the case, for instance, clearly indicate good faith or a clear mistake of fact without taint of negligence, the imposition of the fine alone should be considered as the more appropriate penalty. Needless to say, the determination whether the circumstances warrant the imposition of fine alone rests solely upon the judge. Should the judge decide that imprisonment is the more appropriate penalty, Administrative Circular No. 12-2000 ought not to be deemed a hindrance. The prosecution under BP 22 shall be without prejudice to any liability for any violation in the Revised Penal Code.

IV.

Review of the Related Literature/Decision/Jurisprudence A. BP 22 The Bouncing Checks Law, or Batas Pambansa (BP) Blg. 22, is a law that 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.

The attacks on the constitutionality of BP 22, as discussed in Lozano vs. Martinez, 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.

BP Blg. 22 vs. Estafa BP 22

1. endorser is not liable 2. malum prohibitum 3. issuance of check is for value or on account

Revised Penal Code

1. endorser who acted with deceit knowing that the check is worthless will be criminally liable 2. malum in se 3. it is the means to obtain the valuable consideration from the payee (debt is

4. deceit and damage are not elements of the crime; the gravamen of the offense is the issuance of the check 5. the drawer is given 5 days after receiving notice of dishonor within which to pay or make arrangements for payment 6. that there are no funds or no sufficient funds at the time of issuance or at the time of presentment if made within 90 days 7. the maker or drawer and issuer knows at the time of issue that he does not have sufficient funds in or credit with the drawee bank for payment of the check in full

preexisting) 4. false pretenses or deceit and damage, or at least to cause damage, are the essential and the false pretenses must be prior to or simultaneous with the damage caused 5. given 3 days after receiving notice of dishonor 6. that there are no funds or there are insufficient funds at the time of issuance 7. not necessary that the drawer should know the time that he issued the check that the funds deposited in the bank were not sufficient to cover the amount of the check

B. SC Circular (see appendix A, B, C and D)

9 This Administrative Circular shall be published in a newspaper of general circulation not later than 20 February 2001.

In the case Lim vs. People, (340 SCRA 497) , the Supreme Court held that: "Unlike in estafa, one need not prove that the check issued in payment of an obligation, or that there was damage. The damage is done to the banking system. "Moreover, citing the case of Vaca vs. Court of Appeals, "There we deleted the prison sentence imposed on petitioners. We imposed on them only a fine double the check issued." Portions of the decision follow. In this appeal, petitioner argues that she never knew Seguan and much more, had any "transaction" with her. According to petitioner, she issued the two checks and gave them to Aurelia Nadera, not to Seguan. She gave the two checks to Aurelia Nadera from whom she got two sets of jewelry, as a "security arrangement" or "guarantee" that she would return the jewelry received if she would not be able to sell them.

The appeal has no merit.

C. SC Decisions

10 PEOPLE OF THE PHILIPPINES vs. JOSEFINA M. DIMALANTA 440 SCRA 55 October 1, 2004

FACTS: Appellant Josefina M. Dimalanta was charged with Estafa under Article 315, paragraph 2 (d) of the Revised Penal Code, as amended by Presidential Decree No. 818, for making, drawinga nd issuing twelve (12) checks, knowing fully well that at the time of theissuance of the the said checks, the checks were not covered with sufficient funds in said bank and would not have such fund even on the date stated on the faces thereof, and when the said checks were presented to the drawee bank for encashment, the same were dishonored for the reason "ACCOUNT CLOSED" and despite due notice as required by Republic Act 4885 and further amended by PD 818 and despite repeated demands, appellant Josefina M. Dimalanta refuse and fail to make good her checks and still refused and fails to do so, to the damage and prejudice of ELVIRA D. ABARCA in the amount of P408,826.00.

The evidence for the prosecution disclosed that in the first week of October 1998, appellant, who was then employed at the Caloocan City Engineers Office, called up complainant Elvira D. Abarca on the telephone to express her desire to purchase jewelry. Complainant went to appellants house, where the latter purchased twelve pairs of jewelry. In payment thereof, appellant issued twelve postdated checks with the representation that the same will be

11 sufficiently funded on their respective maturity dates. The first check issued by appellant was honored and paid by the drawee bank. However, the eleven checks, which are enumerated in the Information, were all returned unpaid by the drawee bank for the reason that appellants account was closed.

Appellant failed to pay the value of the checks despite the lapse of the five-day period contained in the demand letter. Appellant filed with the Prosecutors Office a complaint charging appellant with the crimes of Estafa and Violation of Batas Pambansa Blg. 22.

In her defense, appellant denied that she purchased jewelry from complainant, saying that she could not afford them. She alleged that it was complainant who approached her asking for help in selling jewelry. In turn, appellant asked her friend, Levinia Maranan, to look for buyers for the jewelry. Appellant and complainant agreed that Maranan will sell the jewelry and, upon the latters confirmation that the items had been sold, appellant shall deliver to complainant the postdated checks in payment therefor. They further agreed that the unsold pieces of jewelry shall be returned to complainant.

In September 1998, complainant delivered to appellant the pieces of jewelry to be sold, which were then picked up by Maranan. After one week, appellant issued to complainant postdated checks representing the purchase price of the sold jewelry, with the understanding that Maranan will fund the

12 same. Maranan was able to remit to appellant money to cover the first check, hence it was honored by the drawee bank. Maranan failed to fund the second check. In order to cover its amount, appellant gave complainant P25,000.00 out of her own money as partial satisfaction. Subsequently, Maranan, who had apparently encountered financial problems, went into hiding. As a consequence, the rest of appellants checks were dishonored.

Appellant was charged with and convicted of Estafa under Article 315, paragraph 2 (d) of the Revised Penal Code, as amended by Republic Act No. 4885.

ISSUE: Whether appellant is guilty of the crime of Estafa as charged.

RULING: The elements of this form of Estafa are: (1) postdating or issuing a check in payment of an obligation contracted at the time the check was issued; (2) lack of sufficient funds to cover the check; (3) knowledge on the part of the offender of such circumstances; and (4) damage to the complainant.

Damage and deceit are essential elements of the offense and must be established with satisfactory proof to warrant conviction. The false pretense or fraudulent act must be committed prior to or simultaneously with the issuance of

13 the bad check.15 Thus, the drawer of the dishonored check is given three days from receipt of the notice of dishonor to cover the amount of the check. Otherwise a prima facie presumption of deceit arises.

In effect, therefore, appellant issued the checks as evidence of indebtedness to cover the value of the jewelry. It has been ruled in this connection that a drawer who issues a check as security or evidence of investment is not liable for Estafa.

Furthermore, we find that appellant acted in good faith during the transaction. After the first check was dishonored, she exerted best efforts to make good the value of the check, albeit only to the extent of P25,000.00. Good faith is a defense to a charge of Estafa by postdating a check. This may be manifested by appellants act of offering to make arrangements with complainant

as to the manner of payment.

In the case at bar, the evidence for the prosecution is concededly weak. In such cases, even if the evidence for defense is also weak, the accused must be duly accorded the benefit of the doubt in view of the constitutional presumption of innocence that an accused enjoys. When the circumstances are capable of two or more inferences, as in this case, one of which is consistent with the presumption of innocence while the other is compatible with guilt, the

14 presumption of innocence must prevail and the court must acquit.

Courts are mandated to "put prosecution evidence under severe testing." Furthermore, the constitutional presumption of innocence requires them to take "a more than casual consideration" of every circumstance or doubt favoring the innocence of the accused. The evidence for the prosecution must stand or fall on its own weight and cannot be allowed to draw strength from the weakness of the defense. Considering the failure of the prosecution to discharge its burden of proof and overcome the constitutional presumption of innocence, it is not only appellants right to be freed; it is, even more, this Courts constitutional duty to acquit her.

15 GEOFFREY F. GRIFFITH, petitioner, versus COURT OF APPEALS, ET AL.

379 SCRA 95 March 12, 2002

FACTS: In 1985, Phelps Dodge Philippines, Inc. leased its lot and factory building to Lincoln Gerard, Inc. for a term of two years at a monthly rental of P75,000. When Lincoln Gerard, Inc. incurred rental arrearages, Geoffrey F. Griffith, in his capacity as president of Lincoln Gerard, Inc., issued checks.

Two informations for violation of B.P. 22 were filed against petitioner before the Regional Trial Court. Griffith was found guilty of Violation of BP 22.

Petitioner points out that he communicated to Phelps Dodge through a note on the voucher attached to the checks, the fact that said checks were unfunded at the time of their issuance. Petitioner contends that this good faith on his part negates any intent to put worthless checks in circulation, which is what B.P. 22 seeks to penalize. Moreover, as regards the second check that was postdated, petitioner contends that there could not be any violation of B.P. 22 with said check since the element of knowledge of insufficiency of funds is absent. Petitioner could not have known at the time of its issuance that the

16 postdated check would be dishonored when presented for payment later on.

Petitioner argues that his conviction in this case would be violative of the constitutional proscription against imprisonment for failure to pay a debt, since petitioner would be punished not for knowingly issuing an unfunded check but for failing to pay an obligation when it fell due.

Petitioner also asserts that the payment made by Lincoln Gerard through the proceeds of the notarial foreclosure and auction sale extinguished his criminal liability.

On the other hand, private respondent contends that all the elements that comprise violation of B.P. 22 are present in this case. Moreover, the payment in this case was made beyond the five-day period, counted from notice of dishonor, provided by the law and thus did not extinguish petitioners criminal

liability.

For the State, the Solicitor General contends that Lincoln Gerard assured Phelps Dodge, through the note on the voucher attached to the checks, that said checks would be covered with sufficient funds by May 30, 1996, which assurance was final and irrevocable. The OSG also argues that B.P. 22 does not distinguish between a check that is postdated and one that is not, for as long as the drawer issued the checks with knowledge of his insufficient funds and the

17 check is dishonored upon presentment.

There is no unconstitutional punishment for failure to pay a debt in this case, since according to the OSG, what B.P. 22 penalizes is the act of making and issuing a worthless check that is dishonored upon presentation for payment, not the failure to pay a debt.

The OSG asserts that the supposed payment that resulted from Phelps Dodges notarial foreclosure of Lincoln Gerards properties could not bar prosecution under B.P. 22, since damage or prejudice to the payee is immaterial. Moreover, said payment was made only after the violation of the law had already been committed. It was made beyond the five-day period, from notice of dishonor of the checks, provided under B.P. 22.

ISSUE: Whether petitioner Geoffrey F. Griffith, president of Lincoln Gerard, Inc., has been erroneously convicted and sentenced for violation of the Bouncing Checks Law (Batas Pambansa Blg. 22).

RULING: The Bouncing Checks Law was devised to safeguard the interest of the banking system and the legitimate public checking account user. It was not designed to favor or encourage those who seek to enrich themselves through

18 manipulation and circumvention of the purpose of the law.

Moreover, while the philosophy underlying our penal system leans toward the classical school that imposes penalties for retribution, such retribution should be aimed at actual and potential wrongdoers. Note that in the two criminal cases filed by Phelps Dodge against petitioner, the checks issued were corporate checks that Lincoln Gerard allegedly failed to fund for a valid reason duly communicated to the payee. Further, it bears repeating that Phelps Dodge, through a notarial foreclosure and auction that were later on judicially declared invalid, sold Lincoln Gerards property for cash amounting to P1,120,540 to satisfy Phelps Dodge claim for unpaid rentals. Said property was already in Phelps Dodges custody earlier, purportedly because a new tenant was moving into the leased premises. The obligation of Lincoln Gerard to Phelps Dodge for said rentals was only P301,953.12. Thus, by resorting to the remedy of foreclosure and auction sale, Phelps Dodge was able to collect the face value of the two checks, totalling P215,442.65. In fact, it impounded items owned by Lincoln Gerard valued far in excess of the debt or the checks. This was the situation when, almost two years after the auction sale, petitioner was charged with two counts of violation of B.P. 22. By that time, the civil obligation of Lincoln Gerard, Inc. to Phelps Dodge Phils. Inc. was no longer subsisting, though respondent Court of Appeals calls the payment thereof as involuntary. That the money value of the two checks signed by petitioner was already collected, however, could not be ignored in appreciating the antecedents of the

19 two criminal charges against petitioner. Because of the invalid foreclosure and sale, Phelps Dodge was ordered to pay or return P1,072,586.88 to Lincoln Gerard, per decision of the Regional Trial Court of Pasig, Branch 69, which became final after it was affirmed by the appellate court. We cannot, under these circumstances, see how petitioners conviction and sentence could be upheld without running afoul of basic principles of fairness and justice. For Phelps Dodge has, in our view, already exacted its proverbial pound of flesh through foreclosure and auction sale as its chosen remedy.

While we agree with the private respondent that the gravamen of violation of B.P. 22 is the issuance of worthless checks that are dishonored upon their presentment for payment, we should not apply penal laws mechanically.

We must find if the application of the law is consistent with the purpose of and reason for the law. Ratione cessat lex, et cessat lex. (When the reason for the law ceases, the law ceases.) It is not the letter alone but the spirit of the law also that gives it life. This is especially so in this case where a debtors criminalization would not serve the ends of justice but in fact subvert it. The creditor having collected already more than a sufficient amount to cover the value of the checks for payment of rentals, via auction sale, we find that holding the debtors president to answer for a criminal offense under B.P. 22 two years after said collection, is no longer tenable nor justified by law or

20 equitable considerations. Griffith is acquitted of the crime as charged.

Miraflor San Pedro, petitioner vs. The people of the Philippines and The Honorable Court of appeals 387 SCRA 60 August 15, 2002

FACTS: The complainant- Evelyn Odra entrusted to the accused- Miraflor San Pedro, pyrex items to be sold to third persons. In the course of their dealings, the petitioner indebted to the complainant in the amount of P300, 000.00

The complaint demanded for payment in the same amount which the petitioner paid in form of a post- dated check as a security after promising to pay the said amount.

Thereafter, the check was dishonored due to insufficiency of funds and the complaint demanded to be paid in the face value of the check which the petitioner failed to pay. This incident caused the complainant to consult a lawyer who sent a demand letter urging the petitioner to pay the face value of the check within (5) five days from the receipt of the letter. Still, the petitioner failed to pay the amount. Hence, the complainant initiated the filing of the case. The petitioner

21 stated in defense that she gave the check to the complainant as an accommodation and not for value.

ISSUE: Whether or not, the intended reason in issuing, drawing a check should be taken into consideration.

RULING: The court ruled in favor of the complainant, due to the existence of Batas Pambansa 22, Sec.1, which states that:

A check issued as evidence of debt, though not intended to be presented for payment, has the same effect as an ordinary check and the mere act of issuing worthless check is malum prohibitum.

22

RUTH D. BAUTISTA VS. COURT OF APPEALS, ET AL., 360 SCRA 620 July 6, 2001

FACTS: Petitioner Ruth D. Bautista issued to Susan Alona a Metrobank Check dated May 8, 1998 for P1,500,000.00 drawn on Metrobank Cavite City Branch. According to respondent Susan Alona, petitioner Ruth D. Bautista assured her that the check would be sufficiently funded on the maturity date.

When Susan Alona presented the check for payment, the drawee bank dishonored the check because it was drawn against insufficient funds [DAIF].

Susan Alona filed a complaint with the prosecutors office. Ruth Bautista filed a counter-affidavit alleging in her defense that presentment of the check within 90 days from due date thereof was an essential element of the offense of violation of BP 22. Since the check was presented for payment 166 days after its due date, it was no longer punishable under BP 22 and therefore the complaint should be dismissed for lack of merit.

23 ISSUE: Whether the drawer of a check which is dishonored due to lack of sufficient funds can be prosecuted under BP 22 even if the check is presented after ninety [90] days from its due date. RULING: The elements of the offense under BP 22 are (a) the making, drawing and issuance of any check to apply to account or for value; (b) the maker, drawer, or issuer knows 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; and (c) 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.

The ninety (90)-day period is not among these elements . Section 2 of BP 22 is clear that a dishonored check presented within the ninety (90)-day period creates a prima facie presumption of knowledge of insufficiency of funds, which is an essential element of the offense. Since knowledge involves a state of mind difficult to establish, the statute itself creates a prima facie presumption of the existence of this element from the fact of drawing, issuing or making a check, the payment of which was subsequently refused for insufficiency of funds. The term prima facie evidence denotes evidence which, if unexplained or uncontradicted, is sufficient to sustain the proposition it supports or to establish the facts, or to counterbalance the presumption of

24 innocence to warrant a conviction.

The presumption in Sec. 2 is not a conclusive presumption that forecloses or precludes the presentation of evidence to the contrary. Neither does the term prima facie evidence preclude the presentation of other evidence that may sufficiently prove the existence or knowledge of insufficiency of funds or lack of credit. Surely, the law is not so circumscribed as to limit proof of knowledge exclusively to the dishonor of the subject check when presented within

the prescribed ninety (90) day period.

25 Salazar vs People

FACTS: Skiva company, a clothing importer transacted with Aurora manufacturing corporation and Uni-Group Inc. (local clothing manufacturers), through its buying agent, Olivier, for 700 dozens of three (3) different designs of Ladies Jeans. Due to the lack of funds of the local companies, the latter asked for advance payment in order for them to purchase raw materials to make the said amount of goods. Skiva company agreed to make an advance payment through check and will be sent via telegraphic transfer. The check has a face value of $41,300 (then equivalent to P870,370.00). However, due to the length of time to clear the check, the parties made arrangements to remit the funds instead by way of telegraphic transfer. They the agreed that the check shall be returned by Mr Lettmayr (president of bot Aurora and Uni-Group) to Skiva and the amount shall be remitted to the joint account of Mr. Lettmayr and Mr. Jorge Salazar (petitioner; vice president and treasurer ofUni-Group and consultant of Aurora). The petitioner which has access to the account withdrew the amounts of $21,675.21 and $20,000.00 consecutively. The amounts $71.70 and $63.99 are also deducted to the amount as telegraphic transfer and commission for remmitance of the funds to the said account.

Ms. Tujan (Officer in charge of Olivier) learned that the materials bought by the local manufacturers were not enough to meet the quota of 700 dozens.

26 Demand was made against Mr. Lettmayr and Mrs. Salazar. They were filed a criminal complaint for estafa.Mr. Lettmayr was cleared from the complaint and the petitioner was nowhere to be found.

ISSUE: Whether or not the petitioner should be accusedof estafa under Article 315, par 1(b) of the revised penal code. RULING: WHEREFORE, the instant petition is denied and the appealed judgment of the court a quo finding petitioner guilty beyond reasonable doubt of the crime of Estafa under Article 315 paragraph 1 (b) of the Revised Penal Code and that thepetitioner likewise maintains that Skiva has no authority to institute the present action as estafa was not committed against Skiva but against Aurora/UniGroup on the basis of the finding that the transaction between Skiva and Aurora/Uni-Group was one of sale. Thus, petitioner argues that pursuant to Section 3, Rule 110 of the Rules on Criminal Procedure, the complaint should not have been instituted by Skiva as it is not the offended party contemplated by the Rules and petitioner had no obligation to account to Skiva the proceeds of the amount withdrawn from the joint account

27 V. Opinion Bantiling, Derrick

In some regions, people deliberately write checks which could bounce, relying on a concept known as float. Float assumes that it will take several days for a check to be processed, and during that period the check's author could raise and deposit the funds necessary to cover the bounced check. This practice is not advisable, since many banks now use instantaneous processing, in which case the temporary shortfall in funds could be a serious problem.

Most people try to avoid generating a bounced check because it can reflect poorly on a credit record, and repeated bounced checks may lead to being blacklisted by a particular company. Landlords, for example, may require payment of rent in the form of cash or money orders in the future if a tenant writes a bad check. The fees for bounced checks can also rack up surprisingly quickly, and the author can be liable for criminal action taken on behalf of the check's designee.

In some cases, a bank will cover a bounced check, and then charge the author for making up the difference in funds. Generally, when a check bounces back to an individual or company, action will be taken against the author to recover the funds, since presumably the author has already enjoyed the service that the bounced check was supposed to pay for.

28 Cocjin, Angeline

Though the court is always in favor to the offender, I think that the Bouncing Checks Law also known as Batasang Pambansa Bilang 22 is somehow being unjust to the offended party for not imposing a rigorous penalty to ensure that the latter is obeyed. As for example, the court cannot issue a hold- departure order regardless of the amount involved, which I think fosters the violation of the said law into a greater degree since the court does not consider the amount involved in levying a greater penalty. Another factor which I think foster the violation of Bp22 is that there is no warrant of arrest being issued to the offender unless he fails to appear when required by the court and they have the discretion of imposing, imprisonment only, fine only or both and it is entirely possible that only a fine, without imprisonment, will be imposed. With this fact, I think that the court fails to severely maintain the discipline to compel obedience to Bp22. As the court does not requires filing fees in criminal cases, Bp22 seems to be exemption to the rule because the complaint has to pay fees based on the value of the checks and damages claimed, just like in civil case upon filing in the court which I honestly do not see the reason to do the same.

29 Pacsa, Gennady

A check bounces either because there is not enough money or credit in a bank to cover its amount, as in DAIF (drawn against insufficient funds check), NSF (nonsufficient funds check) and closed account.

Batas Pambasa Blg. 22 punishes any person who, KNOWING at the time he issues a check in payment of obligation that he does not have sufficient funds or credit with the drawee bank. The gravamen of this special penal law is the issuance of check, not the non-payment of the obligation.

Checks form part of the banking system for being substitutes for money. Hence, BP Blg. 22 is neither violative of the constitutional provision against imprisonment of non-payment of debt nor the non-impairment clause.

30 Saporas, Khey Melanverg

In my point of view, the generality of Batas Pambansa Blg. 22 (BP 22) was sufficient. It is really for the benefit of the people on the economic world. This is so because such law allows man to deal with checks specified above in such manner that they would not be instantaneously held criminally liable whenever it bounces.

The grace period of five (5) days is already sufficient for a person facing such insufficiency to find a way to settle things out. I think that the same is really on the middle the gravamen is not given that luxury of long period and yet, not also burdened by a short period of time.

Hence, there are short-comings in terms of the penalties and court decisions. I think that the court should not be given the power to choose whether the gravamen be given a fine or imprisonment or both. In reality, a gravamen that has lots of money is being punished only by means of paying fine. This is really unjust. Let us remember that our Constitution vested upon us all the right of being equally protected, no matter the status one is in. This should be standardized and later on, amended.

31 VI. Recommendation Bantiling, Derrick

Many times, bad checks are written inadvertently by people who simply were unaware that their bank balances were too low. It is always a good idea to have a small overdraft line of credit to cover such situations, or keep a close eye on your balance near bill-paying time.

When there are insufficient funds in an account, the bank will "bounce the check" (refuse to honor it). Banks and vendors frequently charge fees for bounced checks, sometimes exceeding the amount for which the check was written. Online banking can help to avoid writing bad checks by allowing you to view your balance more frequently. Consumers can also create a backstop account that is automatically debited if the primary checking account is too low to pay a specific check.

32 Cocjin, Angeline

I therefore recommend that the SC should avoid appearing relaxed in ruling cases under BP22 and that the requisites must be clear enough as to which of it is amounting to the violation of the latter. The court must also impose a greater penalty to the offender and be rigorous in implementing it.

As with regards to the filing fees, I therefore questioned why they charge fees upon filing and I recommend that if it is really necessary then at least charge not in accordance to the value of the check for it will be unjust to the complainant if he was defraud in a great amount and be charge with unreasonable fees before owning fairness.

33 Pacsa, Gennady

It has been observed that the State, under this statute, actually offers the violator `a compromise by allowing him to perform some act which operates to preempt the criminal action, and if he opts to perform it the action is abated. This was also compared `to certain laws allowing illegal possessors of firearms a certain period of time to surrender the illegally possessed firearms to the Government, without incurring any criminal liability. In this light, the full payment of the amount appearing in the check within five banking days from notice of dishonor is a `complete defense. The absence of a notice of dishonor necessarily deprives an accused an opportunity to preclude a criminal prosecution. Accordingly, procedural due process clearly enjoins that a notice of dishonor be actually served on petitioner. Petitioner has a right to demand and the basic postulates of fairness require that the notice of dishonor be actually sent to and received by her to afford her the opportunity to avert prosecution under B.P. Blg. 22.

34 Saporas, Khey Melanverg

In view of my aforementioned opinion, I recommend that the punishment be standardized. There should be a table that the court should follow. For example, if the amount of the bounced check is Php 20, 000 and below, there should be a fine only plus the whole amount thereon. If the bounced check amounts to Php 20, 001 Php 50, 000, there should be an imprisonment of four (4) days. If it amounts to Php 50, 001 Php 100, 000, the imprisonment should be a week and 3 days. If the same amounts to Php 100, 001 150, 000, there should be a combination of a fine and imprisonment.

Filipinos nowadays are becoming hard-headed. The punishment should be such so that it would (1) be equally implemented, (2) jive with the present economic value of money and (3) instill lesson on the gravamen and amongst others.

35 VII. Appendix
ADMINISTRATIVE CIRCULAR NO. 12-2000 RE: PENALTY FOR VIOLATION OF B. P. BLG. 22 Section 1 of B.P. Blg. 22 (An Act Penalizing the Making or Drawing and Issuance of a Check Without Sufficient Funds for Credit and for Other Purposes) imposes the penalty of imprisonment of not less than thirty (30) days but not more than one (1) year or a fine of not less than but not more than double the amount of the check, which fine shall in no case exceed P200,000, or both such fine and imprisonment at the discretion of the court. In its decision in Eduardo Vaca, v. Court of Appeals (G.R. No. 131714, 16 November 1998; 298 SCRA 656, 664) the Supreme Court (Second Division) per Mr. Justice V. Mendoza, modified the sentence imposed for violation of B.P. Blg. 22 by deleting the penalty of imprisonment and imposing only the penalty of fine in an amount double the amount of the check. In justification thereof, the Court said: Petitioners are first-time offenders. They are Filipino entrepreneurs who presumably contribute to the national economy. Apparently, they brought this appeal, believing in all good faith, although mistakenly that they had not committed a violation of B.P. Blg. 22. Otherwise, they could simply have accepted the judgment of the trial court and applied for probation to evade a prison term. It would best serve the ends of criminal justice if in fixing the penalty within the range of discretion allowed by Section 1, par. 1, 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 this case, we believe that a fine in an amount equal to double the amount of the check involved is an appropriate penalty to impose on each of the petitioners In the recent case of Rosa Lim v. People of the Philippines (G. R. No. 130038, 18 September 2000), the Supreme Court en banc, applying Vaca also deleted the penalty of imprisonment and sentenced the drawer of the bounced check to the maximum of the fine allowed by B.P. Blg. 22, i.e., P200,000, and concluded that such would best serve the ends of criminal justice. All courts and judges concerned should henceforth take note of the foregoing policy of the Supreme Court on the matter of the imposition of penalties for violations of B.P. Blg. 22. The Court Administrator shall cause the immediate dissemination of this Administrative Circular to all courts and judges concerned. This Administrative Circular, referred to and approved by the Supreme Court en banc, shall take effect upon its issuance. Issued this 21st day of November 2000.

(appendix A)

[Sgd.] HILARIO G. DAVIDE, JR. Chief Justice

36
(appendix B) ADMINISTRATIVE CIRCULAR NO. 13-2001 February 14, 2001 TO : ALL JUDGES SUBJECT : CLARIFICATION OF ADMINISTRATIVE CIRCULAR NO. 12-2000 ON THE PENALTY FOR VIOLATION OF BATAS PAMBANSA BLG. 22, OTHERWISE KNOWN AS THE BOUNCING CHECK LAW. Clarification has been sought by concerned Judges and other parties regarding the operation of Administrative Circular 12-2000 issued on 21 November 2000. In particular, queries have been made regarding the authority of Judges to: 1. Impose the penalty of imprisonment for violations of Batas Pambansa Blg. 22; and 2. Impose subsidiary imprisonment in the event that the accused who is found guilty of violating the provisions of B.P. Blg. 22, is unable to pay the fine which he is sentenced to pay considering that Administrative Circular No. 12-2000 adopted the rulings in Eduardo Vaca v. Court of Appeals (G.R. No. 131714, 16 November 1998, 298 SCRA 656) and Rosa Lim v. People of the Philippines (G.R. No. 130038, 18 September 2000) as a policy of the Supreme Court on the matter of the imposition of penalties for violations of B.P. Blg. 22, without mentioning whether subsidiary imprisonment could be resorted to in case of the accused's inability to pay the fine. The clear tenor and intention of Administrative Circular No. 12-2000 is not to remove imprisonment as an alternative penalty, but to lay down a rule of preference in the application of the penalties provided for in B.P. Blg. 22. The pursuit of this purpose clearly does not foreclose the possibility of imprisonment for violations of B.P. Blg. 22. Neither does it defeat the legislative intent behind the law. Thus, Administrative Circular No. 12-2000 establishes a rule of preference in the application of the penal provisions of B.P. Blg. 22 such that where the circumstances of both the offense and the offender clearly indicate good faith or a clear mistake of fact without taint of negligence, the imposition of a fine alone should be considered as the more appropriate penalty. Needless to say, the determination of whether the circumstances warrant the imposition of a fine alone rests solely upon the Judge. Should the Judge decide that imprisonment is the more appropriate penalty, Administrative Circular No. 12-2000 ought not be deemed a hindrance. 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;

37
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. The issuance of this Administrative Circular was authorized by the Court En Banc in A.M. No. 00-11-01-SC at its session of 13 February 2001. The Clerk of Court of the Supreme Court and the Court Administrator shall immediately cause the implementation of this Administrative Circular. This Administrative Circular shall be published in a newspaper of general circulation not later than 20 February 2001. Issued this 14th day of February, 2001.

[Sgd.] HILARIO G. DAVIDE, JR. Chief Justice

38
(appendix C) PRESIDENTIAL DECREE No. 818 October 22, 1975 AMENDING ARTICLE 315 OF THE REVISED PENAL CODE BY INCREASING THE PENALTIES FOR ESTAFA COMMITTED BY MEANS OF BOUNCING CHECKS WHEREAS, reports received of late indicate an upsurge of estafa (swindling) cases committed by means of bouncing checks; WHEREAS, if not checked at once, these criminal acts would erode the people's confidence in the use of negotiable instruments as a medium of commercial transaction and consequently result in the retardation of trade and commerce and the undermining of the banking system of the country; WHEREAS, it is vitally necessary to arrest and curb the rise in this kind of estafa cases by increasing the existing penalties provided therefor; NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers in me vested by the Constitution, do hereby decree as part of the law of the land the following amendment to Article 315 of the Revised Penal Code: Section 1. Any person who shall defraud another by means of false pretenses or fraudulent acts as defined in paragraph 2(d) of Article 315 of the Revised Penal Code, as amended by Republic Act No. 4885, shall be punished by: 1st. The penalty of reclusion temporal if the amount of the fraud is over 12,000 pesos but 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 in no case exceed thirty years. In such cases, and in connection with the accessory penalties which may be imposed under the Revised Penal Code, the penalty shall be termed reclusion perpetua; 2nd. The penalty of prision mayor in its maximum period, if the amount of the fraud is over 6,000 pesos but does not exceed 12,000 pesos; 3rd. The penalty of prision mayor in its medium period, if such amount is over 200 pesos but does not exceed 6,000 pesos; and, 4th. By prision mayor in its maximum period, if such amount does not exceed 200 pesos. Section 2. This decree shall take effect immediately. DONE in the City of Manila, this 22nd day of October, in the year of Our Lord, nineteen hundred and seventy-five.

39
(appendix D) PRESIDENTIAL DECREE No. 1689 April 6, 1980 INCREASING THE PENALTY FOR CERTAIN FORMS OF SWINDLING OR ESTAFA WHEREAS, there is an upsurge in the commission of swindling and other forms of frauds in rural banks, cooperatives, "samahang nayon (s)", and farmers' associations or corporations/associations operating on funds solicited from the general public; WHEREAS, such defraudation or misappropriation of funds contributed by stockholders or members of such rural banks, cooperatives, "samahang nayon(s)", or farmers' associations, or of funds solicited by corporations/associations from the general public, erodes the confidence of the public in the banking and cooperative system, contravenes the public interest, and constitutes economic sabotage that threatens the stability of the nation; WHEREAS, it is imperative that the resurgence of said crimes be checked, or at least minimized, by imposing capital punishment on certain forms of swindling and other frauds involving rural banks, cooperatives, "samahang nayon(s)", farmers' associations or corporations/associations operating on funds solicited from the general public; NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby decree and order as follows: 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. Section 2. This decree shall take effect immediately. DONE in the City of Manila, this 6th day of April, in the year of Our Lord, nineteen hundred and eighty.

40
(appendix E)

(Complaint Affidavit for Filing of BP 22 Case) COMPLAINT-AFFIDAVIT I, _____________, Filipino, of legal age, (single / married / widow), and a resident of _____________, Philippines, after being sworn to in accordance with law, depose and state: That I know the person of __Respondent__, who is a resident of _____________, Philippines; That sometime in the morning of __date of issue__, at __place of issue__, Philippines, the said __Respondent__ issued in my favor a __Name of Bank__ Check No. _____________ in the amount of P_____________ as supposed payment for the loan accommodation of P_____________, which I have extended to (him/her); That the said check is drawn against the account of the said __Respondent__ at __Name of Bank__ with Account No. _____________; That at the time the said __Respondent__ issued the delivered the said check to me, (he/she) made the assurance and representation that the said check is a good check and would be covered by sufficient funds when presented for payment; However, when the above-mentioned check was deposited, the same was dishonored and returned by the bank on the ground that the same was drawn against a "CLOSED ACCOUNT".A true and faithful machine reproduction of the said check is hereto attached as Annex "____"; As such, I immediately notified said __Respondent__ of the dishonor and return of the said check and demanded from (him/her) that (he/she) make good the said check within _____________ (____) days from receipt thereof. A true and faithful machine reproduction of my demand letter to (him/her) is hereto attached as Annex "____" When said __Respondent__ failed to heed my demands, I endorsed the said check to my legal counsel who immediately sent a formal demand letter through registered mail with return card on _____________, which was received by the said __Respondent__ on _____________.As of date however, __Respondent__ has unjustifiably ignored all these demands to pay the said account and/or to redeem the said returned check. A true and faithful machine reproduction of my demand letter to (him/her) is hereto attached as Annex ____" I am therefore executing this Complaint-Affidavit in support of the charges for Violation of Batas Pambansa Bilang 22 against the said __Respondent__, who may be served

41 with subpoena and other processes of this Honorable Office at (his/her) last known address at _____________, Philippines; IN WITNESS WHEREOF, I have hereunto set my hand this _____________ at _____________, Philippines. COMPLAINANT SUBSCRIBED AND SWORN to before me this _____________ at _____________.I hereby certify that I have examined the Affiant and that I am fully satisfied that (he/she) has voluntarily executed and understood the contents of (his/her) Complaint-Affidavit. Administering Officer

42

(appendix F)

(Affidavit of Desistance Violation of BP 22) Republic of the Philippines) Province of _________________) S.S. City/Municipality of____________) x----------x AFFIDAVIT OF DESISTANCE I,___________, of legal age, Filipino and a resident of Bacolod City, after having been duly sworn in accordance with law, hereby depose and say: 1.That I am the private complainant in the Criminal Cases Nos.____________to____________entitled "People of the Philippines vs._____________"; for Violation of Batas Pambansa Bilang 22 pending before the Municipal Trial Court, Branch______, ____________City, Philippines. 2.In this regard, the accused___________has already paid in full the amount represented by the checks subject of the above-mentioned cases, to with: Criminal Case No.Check No.Amount 3.That in view of the payment in full by the accused, I would like to manifest that I am no longer interested in the prosecution of the aforementioned criminal cases and I am respectfully requesting the Honorable Public Prosecutor to move for the dismissal of the aforementioned cases against the accused. IN WITNESS WHEREOF, I have hereunto set my hand this_____________ at___________, Philippines. AFFIANT (JURAT)