Philippine Law

REGULATORY FRAMEWORK AND LEGAL ISSUES IN BUSINESS

1-25 TRUE OR FALSE (Anti_Bouncing Checks Law (BP#22)

What the Anti-Bouncing Checks Law punishes is the issuance of a bounding check and not the purpose for which the check was issued. What the Anti-Bouncing Checks Law punishes is the issuance of a bouncing check and not the non- payment of an obligation, or the terms and conditions of its issuance. 3. Each act of drawing and issuing of a bounced check constitutes a violation of the Anti-Bouncing Checks Law. The Rule that "there is only one offense when the offender is moved by one criminal intent" cannot apply to the Anti-Bouncing Checks Law because criminal intent is immaterial. 5 This is punishable under the Anti-Bouncing Checks Law: "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.* This is punishable under the Anti-Bouncing Checks Law: 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 nine (9) days from the date appearing thereon, for which reason it is dishonored by the drawee bank. 7. Where the check is drawn by a corporation, company or entity, the person or persons who actually signed the check on behalf of such drawer shall be liable. 8. 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 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 seven (7) banking days after receiving notice that such check has not been paid by the drawee. 9. The essence of BP22 is the non-issuance of a check, not the payment of an obligation. 10. The Anti-Bouncing Checks Law does not make a distinction as to whether the bad check is issued in payment of an obligation or to merely guarantee an obligation. 11. If notice of non-payment by the drawee bank is not sent to the maker or drawer, then the presumption or prima facie evidence of knowledge of insufficiency of funds cannot arise. 12. The presumption of knowledge of insufficiency of funds or credit does not lie when the check is presented after 90 days from the date of the check. 13. An essential element of the offense is "knowledge" on the part of the maker or drawer of the check of the insufficiency of his funds in or credit with the bank to cover the check upon its presentment. 14. Since this involves a state of mind difficult to establish, the statute itself creates a prima facie presumption of such knowledge where payment of the check "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. 15. To mitigate the harshness of the law in its application, the statute provides that such presumption shall not arise if within five (5) banking days from receipt of the notice of dishonor, the maker or drawer makes arrangement for payment of the check by the bank or pays the holder the amount of the check. 16. Where there are no sufficient funds in or credit with the drawee bank, such fact shall always be explicitly stated in the notice of dishonor ( NoD) or refusal, a mere oral notice or demand to pay would appear to be insufficient for conviction under the law. 17. The full payment of the amount appearing in the check within 5 banking days from NoD is a "complete defense. 18. The NoD of a check, which may be oral or in writing, may be sent to the drawer or maker by the drawee- bank, the holder of the check, or the offended party either by personal delivery or by registered mail. 19. Administrative Circular No. 12-2000 establishes a rule of preference in the application of the penal provisions of BP 22 such that where the circumstances of both the offense and the offender clearly indicate good faith or a clear mistake of fact without taint of negligence, the imposition of a fine alone should be considered as the more appropriate penalty. 20. An individual can be held legally liable for the crime of estafa for issuing bouncing checks. 21. BP22 defines the law on issuance of a check without sufficient funds induding uncollected deposits. 22. 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. 23. Under BP22, credit shall be construed to mean an arrangement or understanding with the bank for the payment of such check. 24. A check is a substitute for money. 25. Another term for bouncing check is "rubber check."