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OF LAW, PROHIBITION AGAINST UNDUE DELEGATION OF POWER; AND PROHIBITION ON AMENDMENTS ON THIRD READING

ISSUING CHECKS WITHOUT OR WITH INSUFFICIENT FUNDS UNDER BP22 1. Issuing a check with knowledge of insufficiency of funds to pay for

the check, and the check is subsequently dishonored by the drawer 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

2. Issuing a check with sufficient funds or credit to pay for the same, but with failure to keep sufficient funds or maintain a credit to cover a full amount of the check if presented within 90 days from the date appearing thereon, for which reason the check is dishonored

ELEMENTS OF THE OFFENSE OF ISSUING BOUNCING CHECKS

1. The making, drawing and issuance of any check to apply to account or for value

2. The maker, drawer, or issuer knows at the time of issue that he doesn’t have sufficient funds in or credit with the drawee bank for the payment of such check in full upon its presentment

3. The 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

ISSUANCE OF BUM CHECKS GIVE RISE TO PRIMA FACIE PRESUMPTION OF KNOWLEDGE

 Gravamen of the offense under BP22 is the act of making and issuing a worthless check or a check that is dishonored upon its presentment for payment

 The law made the mere act of issuing a bum check a malum prohibitum

BP22 PENALIZES ACT OF MAKING OR DRAWING AND ISSUANCE OF BOUNCING CHECKS, NOT ONLY DISHONOR

 The law penalizes the act or making or drawing and issuance of a bouncing check and not only the fact of dishonor

 Where the bouncing check was issued before the effectivity of BP22, but dishonored after such effectivity, the accused who issued the bouncing check didn’t commit a violation thereof as there was no law that was violated

KNOWLEDGE OF MAKER OR DRAWER OF CHECK OF INSUFFICIENCY OF FUNDS ESSENTIAL ELEMENT OF OFFENSE

FILING OF ACTION TO ANNUL DEED OF SALE ON WHICH BOUNCING CHECK WAS ISSUED, NOT A PREJUDICIAL QUESTION

IT IS NOT A DEFENSE THAT THE CHECK WAS ISSUED TO GUARANTEE OR SECURE PAYMENT OF OBLIGATION

FOREIGN CHECKS ARE COVERED BY BP22

ACCUSED MAY BE CONVICTED OF BOTH BP22 AND ESTAFA

AS ELEMENT OF VIOLATION OF BP22, KNOWLEDGE OF INSUFFICIENCY OF FUNDS IS CONTINUING EVENTUALITY FROM ISSUANCE OF DISHONOR VIOLATION OF BOUNCING CHECKS LAW IS TRANSITORY AND CONTINUING CRIME AND ITS VENUE IS ANY OF PLACES WHERE IN PART COMMITTED

IS ISSUANCE OF CHECK FOR PREEXISTING DEBT DEFENSE UNDER BP22?  Under the cases, the issuance of a check without or with insufficient

funds is not estafa where it is issued for a preexisting debt. But would the issuance of such check be a defense under BP22?

 Section 1 of said law in making the drawing or issuance of a check under the circumstances stated in the law of a crime, uses the words “to apply for account or for value”

 Account—to refer to a claim or demand growing out of the sale of goods, performance on services and the like; preexisting debt

JURISDICTION ON BOUNCING CHECKS LAW VIOLATION IS DETERMINED BY ALLEGATIONS IN INFORMATION, PLACE OF ISSUANCE OF CHECKS ELEMENTS OF ESTAFA BY POSTDATING A CHECK OR ISSUING A CHECK IN PAYMENT OF AN OBLIGATION

1. That the offender postdated a check, or issued a check in payment of an obligation.

2. That such postdating or issuing a check was done when the offender had no funds in the bank or his funds deposited therein were not sufficient to cover the amount of the check.

WHEN POSTDATING CHECK IS NOT ESTAFA

1. Postdating a check or issuing it for payment of an obligation, the offender knowing that at the time he had no funds in the bank, or the funds deposited by him in the bank weren’t sufficient to cover the amount of the check, and without informing the payee of such circumstances isn’t a crime in itself as estafa

2. However, under BP22, such issuance of a check would be a crime, where subsequently, the check is dishonored for insufficiency of fund 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

3. If the payee was informed that the check wasn’t covered by adequate funds and it is expected that such funds would be available when the check became due, the drawer isn’t guilty of bad faith in issuing it. Where a person issued a post dated check without funds to cover it and informs the payee of that fact, he isn’t guilty of estafa because there is no deceit

4. Accused issuing unfunded check but with OD or DAUD privilege not guilty of fraudulent intent

DRAWING OF A CHECK WITH INSUFFICIENT FUNDS ISN’T FALSIFICATION WHEN POSTDATING CHECK IS A CRIME

 The payee or the person receving the check must be defrauded by the act of the offender

 To defraud is to deprive of some right, interest, or property by a deceitful device

DISTINCTIONS BETWEEN ESTAFA CONSISTING OF ISSUING CHECKS WITHOUT FUNDS AND VIOLATION OF BP22

ESTAFA BP22

Deceit and damage are essential

elements of the crime Deceit and damage are not essential elements of the crime Mala in se Malum prohibitum

THEFT OF CHECKS

 Checks are personal property and may be subject to theft even when they are not indorsed

SPECIAL TYPES OF CHECKS

1. Cashier’s check—one drawn by the cashier of a bank in the name of the bank against the bank itself payable to a third person or order

2. Manager’s check—check drawn by the manager of a bank in the name of the bank against the bank itself payable to a third person 3. Memorandum check—check on which is written the word

“memorandum” signifying that the drawer engages to pay the bona fide holder absolutely and not upon a condition to pay upon presentment or non-payment

4. Certified checks—a check on which the drawee bank has written an agreement whereby it undertakes to pay the check at any future time when presented for payment, such as, by stamping on the check the word “certified” and underneath it is written the signature of the cashier

5. Crossed checks

HOW CROSSING OF CHECK IS DONE

 Usually done by drawing two parallel lines transversally on the face of the check

 A check may be crossed specially or generally CROSSING SPECIALLY

 A check is crossed specially when the name of a particular banker or a company is written between parallel lines drawn transversally on the face of the check

Check #1234 PNB

Phil. Trust Co. Manila, Philippines

September 24, 2007 Pay to B or order P1000 only.

Sgd. A CROSSING GENERALLY

 A check is crossed generally when only the words “And company” are written between the parallel lines, or when nothing is written at all between the parallel lines

 In this case, payment must be made through the intervention of any company which is duly authorized.

 Otherwise, the payment will be not valid.

 In actual practice, the holder of a crossed check merely deposits it for collection with the bank indicated between the parallel lines or with any bank where he keeps an account in the case of a check crossed generally

Check #1234 Phil. Trust Co.

Manila, Philippines

Pay to B or order P1000 only.

Sgd. A UNDER CROSSED CHECK, THE PAYEE HAS DUTY TO ASCERTAIN HOLDER’S TITLE TO CHECKS

 The SC recognizes the practice that a check with two parallel lines in the upper left hand corner means that it could only be deposited and may not be converted to cash

 Such circumstances should put the payee into inquiry and upon him devolves the duty to ascertain the holder’s title to the check or the nature of his possession

 Failing in this respect, the payee is declared guilty of gross negligence amounting to legal absence of good faith and as such the consensus of authority is to the effect that the holder of the check isn’t holder in good faith

 The NIL doesn’t provide that a holder isn’t a holder in due course may not in any case recover on the instrument if the drawee if the latter has no valid excuse for refusing payment

DRAWEE SHOULDN’T ENCASH A CROSSED CHECK BUT MERELY ACCEPT THE SAME FOR DEPOSIT

 Under usual practice, crossing a check is done by placing two parallel lines diagonally on the left top portion of the check

 The crossing may be special wherein between two 2 parallel lines is written the name of a bank or a business institution, in which case the drawee should pay only with the intervention of that bank or company, or crossing may be general wherein between 2 parallel diagonal lines are written the words “And Co.” or none at all as in the case at bar, in which case the drawee shouldn’t encash the same but merely accept the same for deposit

WHERE OTHER THAN PAYEE OF CROSSED CHECKS PRESENTED IT FOR PAYMENT, THERE IS NO PROPER PRESENTMENT AND DRAWER IS NOT LIABLE THEREON

ADVANTAGES OF CROSSING A CHECK

 It is good precaution when it is to be forwarded by mail or when it is entrusted to an agent and the drawer wants to be sure that it will be paid to the rightful owner

CASE DIGESTS: SECTION 185

172 MORAN V. CA