Requisites to be liable under BP 22

a. Checks without insufficient funds – (BP 22 sec. 1 pg. 341 in the book)

b. Evidence of knowledge of insufficient funds - (BP 22 sec. 2 pg. 356 in the book)

c. Duty of Drawee, rules of evidence (BP 22 sec. 3 pg. 365 in the book)

d. Credit Construed (BP 22 sec. 4 pg. 366 in the book)

2. Comparison with Estafa (Art. 315 {21] (d)

*Knowledge of the maker/drawer: The making, drawing and issuance of a check payment of which is refused by the
drawee 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 face evidence of knowledge of such insufficiency of funds or credit.

Valid Defense - payment; Requirement of Notice: Such maker or drawer will not be liable if he pays the holder thereof
the amount due thereon, or makes arrangements for payment in full by the drawee of such check within (5) banking
days after receiving notice that such check has not been paid by the drawee.

DUTY OF THE DRAWEE: 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.

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.

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.

EFFECT OF ACQUITTAL ON CIVIL LIABILITY: An acquittal does not entail the extinguishment of the civil liability for
dishonored checks. An acquittal based on lack of proof beyond reasonable doubt does not preclude the award of civil
damages. (Mateo v. People, GR 200090, March 6, 2013)

PENALTY:

1. Imprisonment - not less than 30 days but not more than 1 year

2. Fine - not less than 30 days but not more than double the amount of the check, which fine shall not exceed the
amount of P200,000; or

3. Both, at the discretion of the court.

Prescriptive period: Prescriptive period of BP 22 Violation of B.P. Blg. 22 prescribes in four (4) years from the
commission of the offense or, if the same be not known at the time, from the discovery. Thereof

DIFFERENCE WITH ESTAFA BY POST-DATING OR ISSUING A CHECK:

a. GOOD FAITH IS A DEFENSE IN ESTAFA: So that when the accused who issued the check believing that he would be
able to make the corresponding deposit, informed the complainant, when he sensed that he could not make the
deposit, not to present the check to the bank for cancellation, he could not be held liable for Estafa. (See People vs.
Villapando) By informing the payee, there is no deceit. (Firestone Tire and Rubber Co. of the Philippines vs. Ines Chavez) -
good faith is a valid reason
Good faith can be a valid defense in estafa cases involving post-dated or bounced checks. If the accused issued the check
believing they could make the corresponding deposit and informed the payee when they realized they couldn't, it may
not constitute deceit, and they might not be held liable for estafa.

In BP Blg. 22, good faith is NOT a valid defense.

Good faith is not a valid defense in BP 22 cases. Even if the drawer genuinely believed they could make the deposit but
failed to do so, they can still be held criminally liable under this law if they knew at the time of issuance that they didn't
have sufficient funds.

b. PAYMENT OF A PRE-EXISTING OBLIGATION - NO ESTAFA: If the check is in payment of a pre-existing obligation there
is no deceit and hence, the crime of Estafa cannot exist.

In BP Big. 22, even if the check is issued to pay a pre-existing obligation, there may still be liability.

Explanation:

Estafa Involving Payment of a Pre-existing Obligation:

In estafa cases, the essential element that needs to be proven is deceit or fraudulent intent. If a person issues a
check to pay off a pre-existing obligation with the genuine intent to settle that debt, and there's no deceit or
fraudulent intent involved, it typically wouldn't constitute estafa.

For example, let's say Person A owes Person B a sum of money, and they have a written agreement specifying
this debt. Person A issues a check to Person B in the exact amount of the debt, genuinely intending to fulfill the
obligation. However, if the check bounces due to insufficient funds but Person A did not issue the check with the
intent to deceive or defraud Person B, it would likely not be considered estafa. Estafa requires fraudulent intent
or deceit, and if that element is absent, estafa charges are unlikely to apply.

BP 22 Involving Payment of a Pre-existing Obligation:

In BP 22, the central element is the knowledge of the drawer (the person who issued the check) that there are
insufficient funds in their account at the time of issuing the check. This knowledge of insufficient funds is critical,
regardless of whether the check is issued to pay a pre-existing obligation or a new one.

If the drawer knew at the time of issuance that they didn't have sufficient funds to cover the check, it could
potentially lead to a BP 22 violation, even if the check was intended to pay a pre-existing obligation. BP 22 does
not differentiate between checks used to fulfill new obligations and those used to settle pre-existing ones when it
comes to the requirement of knowledge of insufficient funds.

So, in BP 22 cases, even if the intent was to pay off a genuine pre-existing obligation, if the drawer knowingly
issued a check without having the necessary funds in their account, they can still be held liable for violation of BP
22. The law's focus is on the act of issuing a check without adequate funds, regardless of the purpose of the
payment.

estafa involving payment of a pre-existing obligation hinges on the presence of deceit or fraudulent intent

BP 22 focuses primarily on the knowledge of insufficient funds at the time of issuing the check, irrespective of whether
the check is intended to settle a new or pre-existing obligation.

C. ESTAFA MAY BE COMMITTED BY MERELY ISSUING A WORTHLESS CHECK - unlike in BP Big. 22 which requires that the
accused BOTH drew and issued the check.

the difference between estafa and BP 22 regarding the issuance of a worthless check is that estafa requires
fraudulent intent or deceit, with a focus on the intent to deceive or defraud, while BP 22 specifically addresses
 the act of drawing and issuing a check with knowledge of insufficient funds, regardless of the intent. In estafa,
the mere act of issuing a worthless check with fraudulent intent can be enough to establish the offense, while BP
22 emphasizes the process of creating and delivering the check with insufficient funds.

d. PERIOD TO MAKE GOOD THE CHECK - is only 3 days in estafa, but 5 banking days in BP BIg. 22.

LIABLE FOR BOTH ESTAFA AND BP 22: Under Sec. 5 of BP Blg. 22, the prosecution thereof shall be without prejudice to
any liability for violation of any provision of the RPC. It is now well settled that a single act can give rise to Estafa and at
the same time to violation of BP Blg. 22.

- a single act can give rise to both estafa and BP 22 violations. This means that a person can be charged with and
held liable for both offenses if the elements of each offense are satisfied by the same conduct. This is explicitly
stated in Section 5 of BP 22, which provides that the prosecution under BP 22 shall be without prejudice to any
liability for violation of any provision of the RPC (Revised Penal Code).

Estafa is a general penal law offense, while BP 22 is a special penal law specifically addressing the issuance of
bouncing checks.

Drawer: -person or entity who writes the check.

person or organization that is making a payment to someone else.
one who has the bank account from which the funds will be drawn.

Drawee - It's the entity where the drawer has their bank account. When the check is presented for payment, the drawee
bank is responsible for honoring the check by disbursing the funds to the payee (the recipient of the payment) from the
drawer's account. Essentially, the drawee is the bank that holds the drawer's funds and is instructed to pay the specified
amount to the payee.

REQUISITES TO BE LIABLE UNDER BP 22

a. Checks without insufficient funds – (BP 22 sec. 1 pg. 341 in the book)
 Section 1 of BP 22 makes it unlawful to issue a check to apply for an account or for value when the drawer (the
person who issued the check) knows at the time of issuing the check that they do not have sufficient funds in
their bank account to cover the full amount of the check upon its presentation for payment.

Key Points:

 The central element in Section 1 is the knowledge of the drawer. It is a crucial aspect of the offense. The law
requires that the drawer knows there are insufficient funds when they issue the check. This means that mere
accidental or unintentional bouncing of checks is not covered by this law.

Penalties and Consequences:

 Violation of Section 1 of BP 22 is considered a criminal offense in the Philippines.

 The penalties for violating this section can include imprisonment and/or a fine.
 The specific penalties can vary depending on the number of checks involved and the amounts in question.
 If convicted, the drawer may be ordered to pay the amount of the dishonored check(s) and may also face
imprisonment.

It's important to note that BP 22 is intended to deter the issuance of bouncing checks and protect the integrity of
financial transactions. Individuals and businesses in the Philippines are advised to exercise caution and ensure they have
sufficient funds before issuing checks to avoid legal consequences under this law.
ESSENTIAL EMELENTS OF B.P. 22/ ELEMENTS OF VIOLATION of Bouncing Checks Law (BP 22):

1. The making, drawing, and issuance of any check to apply for account or for value: This element signifies that a
person must have written and given a check to someone else as a form of payment or to fulfill an obligation. In
other words, the individual must have created and provided a check to another party.
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: This element involves
the state of mind of the person who issued the check. It implies that the person knowingly wrote and provided
the check while being aware that they didn't have enough money or credit in their bank account to cover the full
amount of the check when it is presented for payment. In essence, they knew the check would bounce due to
insufficient funds.
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: This
element focuses on what happens after the check is presented to the bank for payment. If the drawee bank
refuses to honor the check because there are insufficient funds or credit in the drawer's account, or if it would
have been dishonored even without the drawer ordering a stop payment for any valid reason, this part of the
element is satisfied.

In summary, for someone to be held liable for violating B.P. 22 in the Philippines, all three of these elements must be
present:

1. They issued a check for payment or to fulfill an obligation.

2. They knew they didn't have enough funds or credit to cover the check when issued.
3. The check was subsequently dishonored by the drawee bank due to insufficient funds or credit, or it would have
been dishonored even without a valid stop payment order from the drawer.

If these three elements are proven in a court of law, the person who issued the bounced check can be subject to penalties
and legal consequences under B.P. 22. – the alternative penalties are on pg 343

b. Evidence of knowledge of insufficient funds - (BP 22 sec. 2 pg. 356 in the book)
 deals with the evidence required to establish the drawer's knowledge of insufficient funds when a check is
issued and subsequently refused by the drawee bank.

Section 2 - Evidence of Knowledge of Insufficient Funds:

 This section provides that when a check is made, drawn, and issued, and the drawee bank refuses payment due
to insufficient funds or a lack of credit, within a period of ninety (90) days from the date of the check, this refusal
itself is considered "prima facie" evidence. Prima facie evidence means that it is evidence that, if not rebutted or
disproven, is sufficient to establish a fact. (Check pg. 356)

Key Points:

 If the drawee bank refuses to pay the check within 90 days due to insufficient funds or credit, the law presumes
that the drawer (the person who issued the check) had knowledge of the insufficiency of funds or credit at the
time they issued the check. –presumed pg. 357
 This presumption shifts the burden of proof to the drawer. In other words, it becomes the responsibility of the
drawer to demonstrate that they did not have the requisite knowledge of insufficient funds when issuing the
check.

Options for the Drawer: (presumption is rebutted) pg. 357

  To avoid the presumption of knowledge, the drawer has two options:
1. Pay the holder of the bounced check the full amount due.
2. Make arrangements with the holder for full payment by the drawee (the bank) within five (5) banking days
after receiving notice that the check has not been honored by the bank.

Implications:

 This section of the law is intended to encourage prompt resolution of bounced check issues. If the drawer pays
the amount due or makes arrangements for payment within the specified time frame, the presumption of
knowledge of insufficient funds is rebutted, and they may avoid legal consequences under BP 22.

Penalties and Consequences:

 Violation of BP 22 can lead to criminal penalties, including imprisonment and/or fines. The severity of the
penalties can vary depending on the number of checks involved and the amounts in question.

In summary, Section 2 of BP 22 establishes that the refusal of a check by the drawee bank due to insufficient funds or
credit within 90 days from the date of the check serves as prima facie evidence of the drawer's knowledge of the
insufficiency. The drawer can avoid this presumption by paying the amount due or making payment arrangements within
five banking days after being notified of the check's dishonor.

c. Duty of Drawee, rules of evidence; (BP 22 sec. 3 pg. 365 in the book)
 This section stipulates that when the drawee bank (the bank on which the check is drawn) refuses to pay a
presented check, it has a duty to provide a clear explanation for its dishonor or refusal. This explanation must be
written, printed, or stamped in plain language on the check itself or attached to it.

Key Points:

 The drawee bank must specify the reason for refusing to pay the check. This reason should be stated in a way
that is easily understandable to the holder of the check and anyone who examines it. The goal is to ensure
transparency and clarity regarding the cause of dishonor.
 If the reason for dishonor is the lack of sufficient funds in the drawee bank or a lack of credit with the bank, this
fact must be explicitly mentioned in the notice of dishonor or refusal.

Rules of Evidence:

 Section 3 also establishes rules of evidence for legal proceedings related to bounced checks. It states that in any
prosecution under BP 22, the introduction of an unpaid and dishonored check with the drawee's refusal to pay,
as written, stamped, or attached to the check, shall be considered prima facie evidence of several key elements:
1. The making or issuance of the check.
2. The proper presentment of the check to the drawee bank for payment.
3. The dishonor of the check.
4. That the dishonor occurred for the reason provided by the drawee on the check.

Notwithstanding 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.

Regarding Orders to Stop Payment:

 Even if the drawee bank has received an order to stop payment on the check, the bank must still state in the
notice that there were no sufficient funds in the account or credit with the bank for the full payment of the
check if this is indeed the case.
Implications:

 This section of BP 22 aims to ensure that both the holder of the check and the legal system have access to clear
and easily understandable information about why a check was dishonored. It also establishes the presumption
that the presented check is evidence of its making, presentment, dishonor, and the reason for dishonor.

Penalties and Consequences:

 Violation of BP 22 can lead to criminal penalties, including imprisonment and/or fines, depending on the
circumstances of the case.

In summary, Section 3 of BP 22 mandates that the drawee bank must clearly state the reason for dishonoring a check,
establishes rules of evidence for legal proceedings related to bounced checks, and ensures transparency in the notice of
dishonor, including when there's an order to stop payment.

d. Credit Construed (BP 22 sec. 4 pg. 366 in the book)

Definition of "Credit" within the Context of BP 22:

 This section defines the term "credit" as it pertains to the law

 it is specifically defined to mean "an arrangement or understanding with the bank for the payment of such
check."

Key Points:

 BP 22 emphasizes that when the law mentions "credit" in the context of a check, it is referring to an
arrangement or understanding between the drawer (the person who issued the check) and their bank regarding
the payment of that particular check.
 this means that when a drawer issues a check, they should have an arrangement or understanding with their
bank to ensure that there are sufficient funds available to cover that specific check when it is presented for
payment.

Implications:

 This definition is important for legal clarity and precision. It ensures that when individuals are charged with
violating BP 22 due to a lack of "credit" with the bank, it's clear that the law is referring to the specific
arrangement or understanding related to the payment of the check in question.

Penalties and Consequences:

 Violation of BP 22 can result in criminal penalties, including imprisonment and/or fines, depending on the
circumstances of the case. Understanding the specific definition of "credit" within the context of the law is
important for both individuals and legal professionals involved in cases related to bounced checks in the
Philippines.

In summary, Section 4 of BP 22 defines the term "credit" within the context of the law to mean an arrangement or
understanding with the bank for the payment of a specific check. This definition clarifies the legal meaning of "credit" in
the context of BP 22 offenses.