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.