It is inevitable that we will encounter a check at least once in our lifetime. This medium of commerce is still very common despite the proliferation of credit cards. Sadly, with the increase in its use there is also the increase in the number of individuals taking advantage of checks to defraud other people.
For this reason, a provision in a Revised Penal Code was placed to deal with this issue. This law however has defects and deemed insufficient to answer certain situations, thus the Bouncing Checks Law (B.P. 22) was passed into law.
For non-lawyers, these two laws may create confusion because of its highly technical terminologies. As such, I have decided to write this simple guide to aid those who seek more information about estafa and the Bouncing Checks Law (B.P. 22).
How is estafa through the issuance of bouncing checks committed?
It is committed by means of any of the following false pretenses or fraudulent acts executed prior to or simultaneously with the commission of the fraud:
By postdating a check, or issuing a check in payment of an obligation when the offender had no funds in the bank, or his funds deposited therein were not sufficient to cover the amount of the check. (Article 315(2)(d) of the Revised Penal Code as amended by R.A. 4885)
What are the elements of estafa through the issuance of bouncing checks?
This form of estafa has the following elements:
- Postdating or issuance of a check in payment of an obligation contracted at the time the check was issued
- Insufficiency of funds to cover the check, and
- Damage to the payee thereof.
If any of these elements is not present then a person cannot be held liable for estafa.
Marian went to a boutique to shop for clothes. Since she is a friend of the store owner, she was allowed to pay later. After 10 days, Marian issued a check in payment of the clothes she bought. The check bounced to the dismay of the store owner. Can Marian be held liable for estafa?
No. Marian cannot be held liable for estafa because the check was issued in payment of a pre-existing debt. As mentioned earlier, estafa through the issuance of a bouncing check can be committed only if the check was issued in payment of an obligation contracted at the time the check was issued. Note however that while there is no estafa, nevertheless, Marian can be held liable for another crime, which will be discussed below.
Can the issuance of bouncing checks give rise to other offense aside from estafa?
Yes. A single act of issuance of bouncing checks may give rise to several offenses such as estafa and violation of B.P. 22 or the Bouncing Checks Law
How is a violation of the Bouncing Checks Law committed?
There are two possible ways by which this can be committed, to wit:
- 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 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
- 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.
What are the elements of violation of the Bouncing Checks Law?
An offence under this law is committed when the following elements are present:
- Making, drawing and issuance of any check to apply for account or for value;
- 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 such check in full upon its presentment; and
- 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.
How can there be presumption that the maker, drawer, or issuer had knowledge of the insufficiency of funds?
The presumption arises only after it is proved that the issuer received a notice of dishonor and that within 5 days from receipt thereof, he failed to pay the amount of the check or make arrangement for its payment.
In the same example given earlier, can Marian be held liable for violation of the Bouncing Checks Law?
Yes, because in Bouncing Checks Law, unlike in estafa under Article 315(2)(d) of the Revised Penal Code a person can be held liable for making, drawing or issuing a check for account or for value. Meaning, even if the check was issued in payment of an existing obligation, the person can still be held liable.
Can Marian use as a defense the fact that there was no malice or bad faith on her part when she issued the check?
No. The law does not consider important whether or not malice and intent attended the issuance of the check.
If Marian pays the check or makes an arrangement for its payment within 5 days from notice of the dishonor, what is the result?
She can invoke this payment as a complete defense if a case will be filed against her by the store owner.