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CHECKS
LAW
BP 22
WHAT IS A CHECK?
Under
WHAT IS A CHECK?
Mitra v. People, G.R. No. 191404, 5 July 2010, a
check is a negotiable instrument that serves as a
substitute for money and as a convenient form of
payment in financial transaction and obligations. The
use of checks allows commercial and banking
transactions to proceed without the actual handling of
money, thus, doing away with the need to physically
count bills and coins whenever payment is made. It
permits c and b transactions to be carried out quickly
and efficiently. But the convenience afforded by checks
is damaged by unfunded checks that adversely affect
confidence in our c and b activities, and ultimately
injure public interest.
In
A CHECK IS
NOT A LEGAL
TENDER.
representing deposit of
payment do not have legal
tender
power
and
their
acceptance in payment of
debts, both public and private,
is at the option of the creditor,
provided, however, that a check
which has been cleared and
credited to the account of the
creditor shall be equivalent to
a delivery to the creditor in
cash in an amount equal to the
amount credited to his account.
SECTION 63 OF THE
CENTRAL BANK ACT
Checks
Unless
there
is
an
express
stipulation to that effect, the
creditor
cannot
be
compelled
partially to receive the presentation
in which the obligation consists.
Neither may the debtor be required
to make partial payments.
However, when the debt is in part
liquidated and in part unliquidated,
the creditor may demand and the
debtor may effect the payment of the
former without waiting for the
liquidation of the latter.
PURPOSE OF
THE
BOUNCING
CHECKS LAW
PURPOSE
To address the problem of the continued issuance
and circulation of unfunded checks by
irresponsible persons (specific purpose). It aims
to put a stop to or curbing the practice of
issuing checks that are worthless (those that
end up being rejected and dishonored in
payment). It is proscribed by the state because
of the injury it causes to public interests.
It considers the act as an offense property and
against public order.
PURPOSE
To declare the issuance of an unfunded check as
malum prohibitum is 1) to punish the offender
in order to stop him and other from
committing the offense, 2) to isolate him
from society, 3) to reform and rehabilitate
him, and 4) to maintain social order.
The thrust of the law is to prohibit under pain of
legal sanctions the making of worthless checks
and putting them in circulation and not to coerce
the debtor to pay his debt. Therefore, it is
punished as an act against public order and not
against property. Lozano vs. Martinez, G.R. No.
L-63419, 18 December 1986.
BOUNCING CHECK
Bouncing
or rubber
check
is
the
issuance of checks
without
funds.
Cruz v. IAC, G.R.
No. L-66327, 28
May 1984.
DAIF
NSF
DAUD
BOUNCING CHECK
Drawn
against a
bank account with
insufficient funds
Drawn
against
non-sufficient
funds
Drawn
against
uncollected
deposit.
DAIF
NSF
DAUD
DRAWER
(ISSUER)
RETURN TO
ISSUER
DRAWEE BANK
DAIF
NSF
DAUD
LIABILITY OF THE
DRAWER (SEC. 61, NIL)
CHECKS COVERED BY BP 22
Checks in general
Checks issued to pay a pre-existing obligation
Crossed check
Accommodation or guarantee check
Current checks
Post-dated checks
Deposit check
Corporate check
Memorandum check
Foreign check (drawn against a foreign bank)
Except Managers check and Cashiers check
Under Section 3
Natural person
LIABILITY AS PRESCRIBED IN
SECTION 5OF BP22
DEFENSES IN BP 22 CASES
Forgery
No notice of Dishonor
Under Rule 119, Section 9, Revised Rules on Criminal Procedure, and action against
the accused may be dismissed if not brought to trial within the time limit required
under Sec. 1 (g), Rule 116 and Section 1 as extended by Section 6 thereof. Failure of
the accused to move for dismissal shall be a waiver of such right to dismiss.
Prescription
The right of every person to suspend payments for valid cause (e.g., dissatisfaction)
shall not render him liable for BP 22. (Sycip v. CA)
Without notice giving him the chance to make payment arrangements within 5
working days, one cannot raise the issue that he had knowledge of the insufficiency of
funds
Prescribes in 4 years from the commission of the offense, or if not known, from the
time of the discovery of such
Full payment
It is a general rule that only a full payment at the time of its presentment or
during the five-day grace period shall could exonerate one from criminal
liability.