Applicability of Batas Pambansa Blg. 22 to “Stop-Payment-Order” (SPO) Returned Checks in the Philippines
(A comprehensive doctrinal, statutory, and jurisprudential survey)
1. Statutory Framework
| Citation | Key Text |
|---|---|
| BP 22, § 1 | *“Any person who makes, draws and issues any check… which is subsequently dishonored **for insufficiency of funds or credit, or *would have been dishonored for the same reason had not the drawer, without valid cause, ordered the drawee bank to stop payment… shall be punished…” (emphasis supplied). |
The under-lined clause—added by Congress precisely to plug the loophole of an eleventh-hour stop-payment order—makes clear that an SPO does not, by itself, immunize the drawer from BP 22 if the check would have bounced for lack of funds.
2. Elements of a BP 22 Offence and Where an SPO Fits
- Making, drawing, or issuing a check.
- Knowledge of insufficiency of funds at the time of issuance (a subjective element).
- Dishonor of the check or proof that it would have been dishonored for the same reason but for a stop-payment order without valid cause.
- Notice of dishonor (written, by the bank or payee) and failure of the drawer to pay or make arrangements within five (5) banking days from receipt of notice—giving rise to a presumption of knowledge of insufficiency under the law.
Take-away: An SPO squarely engages element 3; it satisfies the statutory condition if prosecution can show that, had the drawer not intervened, the check still lacked covering funds.
3. What Is a “Stop-Payment Order”?
An SPO is an instruction by the drawer to its drawee-bank to refuse payment on a check already issued and outstanding. Grounds commonly invoked:
- Loss, theft, or forgery of the check.
- Commercial dispute with the payee (non-delivery or defective goods/services).
- Clerical mistakes in the instrument.
- Attempt at circumvention where the drawer knows funds are insufficient.
Only the last of these is punishable under BP 22; the law itself carves out SPOs “with valid cause.”
4. Jurisprudential Treatment of SPOs under BP 22
While each case turns on its facts, the Supreme Court has consistently applied the doctrine that “the manner of dishonor is immaterial”—what matters is the state of the drawer’s account when the instrument was drawn and when it matured. A sampling (non-exhaustive) of landmark rulings:
| Case (Year) | Holding on SPO & BP 22 |
|---|---|
| People v. Prieto (2000) | Failure to present the account balance ledger notwithstanding SPO; conviction affirmed because evidence showed insufficiency on drawing date. |
| People v. Lising (1996) | Drawer ordered SPO after issuance; bank records proved the account never had enough funds—BP 22 liability upheld. |
| Tan v. People (2013) | Reiterated that SPO “does not erase criminal liability” if prosecution establishes insufficiency and requisite notice. |
| Abaigar v. People (2012) | An SPO done for “valid commercial reasons” (dispute over consideration) may exonerate if drawer shows actual sufficiency of funds and bona-fide grievance. |
| Jesusa Fernandez v. People (2000) | Merely issuing an SPO is not a defense; what counts is proof that funds were available and the order had legal justification. |
Guiding thread: Proof of actual sufficiency at the crucial dates rebuts liability; mere issuance of SPO does not.
5. Presumptions & Burdens of Proof
Once written notice of dishonor is served and the drawer still fails to pay within five banking days, the law raises a rebuttable presumption of knowledge of insufficiency. If an SPO is in play, prosecution must additionally demonstrate (usually via bank certification) that:
- The account lacked funds both when the check was issued and when presented; or
- The drawer withdrew or shifted the funds before presentment, rendering the check worthless.
The burden then shifts to the accused to show:
- Valid cause for the SPO (e.g., lost or stolen check, forged endorsement, ongoing civil dispute), and
- Actual sufficiency of funds or timely payment/restitution within the 5-day window.
6. Interaction with Estafa (Art. 315 §2(d), Revised Penal Code)
| Point of Comparison | BP 22 | Estafa by Bouncing Check |
|---|---|---|
| Nature | Mala prohibita (intent irrelevant) | Mala in se (requires deceit & damage) |
| Element of Damage | Not essential | Essential |
| SPO Relevance | Liability arises if insufficiency established regardless of deceit | SPO can indicate intent to defraud; prosecution must still prove deceit & prejudice |
| Penalty Range | Imprisonment ≤ 1 year and/or fine ≤ double check amount (but not > ₱200,000); SC Admin. Circular 12-2000 favors fine-only sentences in BP 22 | Penalties vary with damage value (RPC as amended by R.A. 10951) |
The same act can give rise to both offenses (doctrine of separate delicts), though courts often impose BP 22 penalties and regard subsequent payment as mitigating for estafa.
7. Procedural Must-Knows for Practitioners
Demand & Notice
- Must be written, served personally or received at the last known address.
- Date-stamped receipt is critical; absence is fatal to prosecution.
Five-Banking-Day Grace Period
- Runs from actual receipt of notice.
- Payment, tender, or provisional arrangement (e.g., manager’s check) within the period avoids criminal liability, whether the dishonor ground was SPO or NSF.
Bank Certifications
- Prosecution typically presents two: (a) balance as of drawing date; (b) balance on presentment date.
- A certification that funds were sufficient on either relevant date is prima-facie defense.
Sentencing Trends
- Supreme Court circulars strongly urge fine-only penalties absent aggravating facts, aligning with Philippine policy to decongest jails and to view BP 22 as primarily protecting commercial stability.
8. Defenses Specific to SPO Situations
| Defense | When Viable | Evidentiary Showing |
|---|---|---|
| Valid Cause for SPO | Lost/stolen check; forged payee; breach of underlying contract; double payment | Police blotter, notarized affidavit, correspondence, ledger balances |
| Actual Sufficiency of Funds | Account had enough cover at issuance & presentment | Bank statements, account history |
| Payment within 5 Days | Even after dishonor or SPO | Receipts, deposit slips, acknowledgments |
| Lack of Jurisdiction / Wrong Venue | Check delivered or dishonored outside charging court’s jurisdiction | Proof of place of issuance, delivery, or dishonor |
| Defective or No Written Notice | Oral demands only; notice sent to wrong address | Absence of registry receipt, testimony on non-receipt |
9. Civil Liability and Restitution
Conviction automatically carries civil liability equal to check amount plus legal interest. Acquittal on BP 22 does not bar a civil action on the underlying obligation; conversely, payment after conviction does not erase the criminal record but can reduce penalties on appeal.
10. Pending Reforms & Policy Considerations (as of June 2025)
- Multiple bills have sought decriminalization of BP 22 in favor of purely civil sanctions; none have yet become law.
- Bangko Sentral ng Pilipinas (BSP) circulars promote electronic fund transfers to minimize post-dated checks, indirectly reducing BP 22 exposure.
- Courts increasingly encourage mediation and compromise at inquest level for SPO-related cases.
11. Practical Compliance Tips
- Maintain Adequate Float: Keep a running buffer; remember that deposits may clear 24–48 hours after crediting.
- Use Manager’s Checks or Digital Payments for large-value transactions subject to performance disputes.
- Document SPO Reasons contemporaneously—email to payee explaining cause, police blotter for loss, etc.
- Respond Promptly to Demand Letters; even partial payment within five banking days is a statutory escape hatch.
- Audit Checkbooks; cancel spoiled leaves formally and record them to avoid accidental issuance.
12. Conclusion
An SPO is not a silver bullet against BP 22. The law expressly regards a stop-payment order as equivalent to a bounce if (and only if) the check would have been dishonored for lack of funds and the drawer lacked a valid reason. The doctrinal thread from People v. Lising through Tan v. People is uniform:
“What the statute punishes is the issuance of a worthless check under circumstances showing indifference to the rights of the payee, whether that worthlessness is exposed by a bank’s refusal or by the drawer’s own stop-payment.”
Accordingly, liability (and defenses) hinge not on the drawer’s instruction to the bank but on the financial reality behind the paper and the drawer’s conduct within the five-banking-day grace period. Counsel and commercial actors alike must therefore treat SPOs with caution, ensuring that any order to halt payment is firmly grounded on valid cause—and on a ledger that can pass judicial scrutiny.