Checks and the Law

There are two legal provisions regarding the issuance of checks in our laws and both are criminal in nature.  The first falls under the crime of estafa and is committed by post-dating a check, or issuing a check in payment of an obligation when the offender therein were not sufficient to cover the amount of the check. The failure of the drawer of the check to deposit the amount necessary to cover his check within three (3) days from receipt of notice from the bank and/or the payee or holder that said check has been dishonored for lack of insufficiency of funds shall be prima facie evidence of deceit constituting false pretense or fraudulent  act.

The second is a law in itself, Batas Pambansa Blg. 22, more popularly known as B.P. 22.  This crime is committed by 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.

So how do we differentiate the two?

Settled is the rule that, to constitute estafa, the act of postdating or issuing a check in payment of an obligation must be the efficient cause of defraudation and, as such, it should be either prior to or simultaneous with the act of fraud. The offender must be able to obtain money or property from the offended party because of the issuance of the check or that the person to whom the check was delivered would not have parted with his money or property had there been no check issued to him. Stated otherwise, the check should have been issued as an inducement for the surrender by the party deceived of his money or property and not in payment of a pre-existing obligation.

On the other hand, the elements of the offense under Section 1, BP Blg 22, are: (1) the making, drawing and issuance of any check to apply to account or for value; (2) the maker, drawer or issuer knows that at the time of issue he does not have sufficient funds in or credit with the drawee bank for the payment of such in full upon presentment; and (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. 23

It will be noted that BP Blg. 22 requires that the drawer of the check must have knowledge at the time of issue that he does not have sufficient funds in or credit with the drawee bank. Under Section 2 thereof, 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, is prima facie evidence of knowledge of such insufficiency when the check is presented within 90 days from the date of the check. However, the prima facie evidence of knowledge of such insufficiency does not lie when the maker or drawer pays the holder of the check the amount due thereon, or makes arrangements for payment in full by the drawee of such check within five (5) banking days after receiving notice that such check has not been paid by the drawee.