Checks are used prevalently in business affairs. Checks are issued not only as a mode of payment, but also as a deposit, a guarantee, or even as evidence of a pre-existing debt. Funded checks are considered a substitute for money, allowing the seamless flow of transactions even without the actual exchange of cash.
At present, individuals and business establishments can easily obtain checking accounts. Sadly, the convenience afforded by the easy access to checks resulted in the circulation of unfunded or worthless checks, i.e., “bum” checks.
Bum checks pose an inimical threat to the integrity of banking and financial transactions, which consequently damages the public interest. To curb this practice, the Batas Pambansa Blg. 22 (“BP 22”) was enacted to criminally sanction persons who are found to have issued bum checks.
Elements of BP 22
To be liable for violation of BP 22, the following essential elements must be proven:
(1) the making, drawing, and issuance of any check to apply for account or for value.
(2) the 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 the check in full upon its presentment.
(3) the 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.
Notice of Dishonor
Of the three elements, the second element is the hardest to prove as it involves a state of mind. Thus, Section 2 of BP 22 creates a presumption of knowledge of insufficiency of funds. The legal presumption arises by proof that:
a) The check, upon presentment for payment within ninety (90) days from issuance, is refused payment; and
b) The issuer had received a written notice of dishonor and that within five (5) banking days from receipt thereof, he failed to pay the amount of the check or to make arrangement for its payment.
The proof of receipt of the notice of dishonor cannot be taken lightly. The BP 22 gives the issuer a chance to pay the value of the check that was dishonored within five banking days from notice. The absence of said notice thus deprives the issuer of the opportunity to preclude criminal prosecution. Procedural due process demands that a notice of dishonor be actually served upon the issuer of the check.
Who are liable
· The person who issued the check
· An “accommodation party,” or one who signed the check without receiving value in exchange, and who issues the check for the purpose of lending his name to some other person, may also be held liable. BP 22 is a special law which punishes the act of issuing bum checks regardless of intent. The law proscribes the mere act of issuing a bad check for being pernicious to public welfare.
· In case a check is issued in behalf of a corporation or other legal entity, the person who actually signed the bounced check is liable. However, in the event of conviction, the corporate officer who issued the check is only civilly liable. In case of acquittal, a corporate officer is discharged from any civil liability arising from the issuance of the worthless check in the name of the corporation he represents.
Venue and Jurisdiction
A criminal complaint for violation of BP 22 may be filed either at the place where the check was issued, drawn, delivered, or deposited. BP 22 cases are categorized as transitory or continuing crimes, meaning that some acts material and essential thereto and requisite in their consummation occur in one municipality or territory, while some occur in another. In such cases, the court where any of the essential and material acts have been committed maintains jurisdiction to try the case; it being understood that the first court taking cognizance of the same excludes the other.
BP 22 cases are heard and tried by the Metropolitan Trial Court, Municipal Trial Courts, Municipal Trial Courts in Cities, and Municipal Circuit Trial Courts (MCTCs) following the Rules on Summary Procedure.
Judgment
The penalty for violation of BP 22 is imprisonment for at least thirty (30) days but not more than one (1) year, or a fine of at least double the amount of the check but not to exceed P200,000, or both such fine and imprisonment at the discretion of the court.
In 2001, the Supreme Court issued Administrative Circular (AC) 12-2000 recommending the imposition of fines instead of imprisonment. In AC 13-2001, however, the Supreme Court clarified that A.C. No. 12-2000 was enacted not to remove imprisonment as an alternative penalty, but to lay down a rule of preference in the application of the penalties under BP 22. In other words, BP 22 violations are not decriminalized because the rule of preference in A.C. No. 12-2000 does not foreclose the possibility of imprisonment for violators of BP 22. Moreover, even if only a fine is imposed, the accused may still suffer subsidiary imprisonment if he is unable to pay.
The criminal action for violation of BP 22 is deemed to include the corresponding civil action, and no reservation to file such civil action separately is allowed. Thus, in case of criminal conviction, the court shall also determine the civil liability of the accused.
However, if the accused is acquitted on the ground of insufficiency of evidence, the accused may still be held civilly liable and ordered to pay the value of the bounced check. This is because the civil liability of the accused is not automatically extinguished upon dismissal of the criminal case for failure of the prosecution to establish guilt beyond reasonable doubt.