16th Apr 2013

bounced check

A common predicament faced by businessmen is violating the Batas Pambansa Blg. 22 also known as the Bouncing Checks Law. Evidently, businessmen issue checks as a matter of practice, and sometimes when the due dates of these checks fall, either by inadvertence or unavailable finances, the check bounces.

BP 22 punishes a person for issuing a worthless check. A check is obviously worthless when, at the time it is encashed for payment, which must be within ninety days from issuance, it is dishonored by the issuing bank because of insufficient funds, or even when the account against which the check was drawn was already closed. In any of these cases, the issuer of the check commits a violation of BP 22, and may be held liable for imprisonment of thirty days to one year or a fine a double the value of the check or both at the discretion of the court. Moreover, the issuer of the check may also be liable for imprisonment, even if only a fine is imposed by the court, if the issuer has no sufficient property to pay the fine imposed, in which case he or she shall be liable to serve a prison term at the rate of one day for each eight pesos of the unpaid fine.

Another manner in which a person becomes liable under BP 22 is when the issuer orders his or her bank to make a stop payment of the check without any valid reason and the check would have been dishonored for insufficiency of funds had it not been for the stop payment order given by the issuer.

It must also be remembered that prosecution under BP 22 is not a bar for prosecution for Estafa, and the issuer of the check may be held liable for one or both crimes, singly or simultaneously when the complaints are filed in separate courts.

But the issuer of the check is not left with remedies. Our Supreme Court has sanctioned numerous defenses which have acquitted individuals charged with a violation of BP 22. Possible defenses in an indictment include 1) payment of the value of the dishonored check within five banking days from receipt of the notice of dishonor; 2) payment of the value of the check before filing of the criminal case in court; 3) failure to serve a written notice of dishonor of the check to the issuer; 4) novation or change in the underlying obligation of the parties before the filing of the criminal case in court; 5) a stop payment order pursuant to a valid reason such as non-delivery of goods or services; and 6) knowledge by the payee that the check was not supported by sufficient funds when the issuer issued the check.

A violation of BP 22 is not really a wrong in itself or involves wrongful or immoral conduct. Since committing a violation of BP 22 is not an inherently wrong act, the Supreme Court has, in numerous cases, merely imposed a penalty of fine, understanding the nature of the offense and the problems that every businessman encounters.

Let us help you. For further inquiries, you may seek legal assistance by e-mailing us at info@ndvlaw.com.

Nicolas & De Vega Law Offices is a full service law firm in the Philippines. You may visit us at the 16th Flr., Suite 1607 AIC Burgundy Empire Tower, ADB Ave., Ortigas Center, 1605 Pasig City, Metro Manila, Philippines. You may also call us at +632 4706126, +632 4706130, +632 4016392.

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