BP 22 Violations Involving “Security Checks” Drawn on a Closed Account (Philippine Law)
1. Statutory Foundation
Batas Pambansa Blg. 22 (the “Bouncing Checks Law”), approved April 3 1979, punishes any person who “makes, draws or issues any check to apply on account or for value, knowing at the time of issue that he does not have sufficient funds or credit with the drawee bank… and the same is subsequently dishonored.”
- Coverage is universal: natural or juridical persons, officers signing on behalf of corporations, and even agents or accommodation parties may be held liable.
- Public-policy objective: to deter the proliferation of worthless checks and uphold confidence in the banking system, regardless of civil intent.
2. Elements of the Offense
To secure a conviction the prosecution must establish, beyond reasonable doubt:
| Element | What the State must prove | Key Comments |
|---|---|---|
| (a) The accused made, drew, or issued a check. | Signature need not exactly match specimen; intent to issue suffices. | May be post-dated, on-dated, or undated. |
| (b) The check was issued to apply on account or for value. | Includes loans, payment, deposits, advances; Supreme Court has ruled that even a check “merely to secure” an obligation meets this element. | |
| (c) The accused knew at issuance that the account lacked funds or credit OR had been closed. | Knowledge is presumed if the check is dishonored and notice is served. | |
| (d) The check was subsequently dishonored by the drawee bank for insufficiency of funds, closed account, or the like. | A stamped memorandum such as “ACCOUNT CLOSED” or “DRAWER UNKNOWN” is prima facie proof. | |
| (e) The drawer failed to pay in full within five (5) banking days from receipt of written notice of dishonor. | Written notice must be proven; absence is fatal to prosecution. |
Distinctive point for closed-account checks: once an account is closed, the drawer necessarily knows no funds exist; element (c) is virtually automatic.
3. “Security” Checks Versus Payment Checks
Early defendants argued that BP 22 applies only to checks issued as immediate payment. The Supreme Court rejected that contention in Lozano v. Martinez (G.R. L-63419, 1986) and a long line of cases (e.g., Magno v. CA, Niñal v. People). A check given merely as a guarantee (collateral, earnest money, installment security) is still covered because BP 22 penalizes the act of issuing a worthless check, not the civil purpose behind it.
Thus, a check tendered “only for security” does not insulate the issuer from criminal liability when it bounces.
4. Implications When the Account Is Already Closed
- Conclusive insufficiency: A closed account has zero balance; the bank will automatically stamp “ACCOUNT CLOSED,” satisfying element (d).
- Stronger presumption of knowledge: Since closure is an overt act by the depositor (or, at the least, brings a mailed bank notice), courts infer that the drawer knew the check would bounce.
- No “good-faith” escape: Claiming ignorance because the closure was “administrative” or “by mistake” rarely prospers unless convincingly documented (e.g., bank error proven by records).
5. Notice of Dishonor & the “Five-Day Grace”
- Who must give notice? Either the payee/holder or the bank.
- Form: Any written notice personally served, left at the drawer’s residence, or sent by registered mail. Jurisprudence (e.g., Vaca v. CA, Colar v. People) stresses that testimony plus the actual demand letter or registry receipt is required; a mere bank memo is not sufficient.
- Effect of payment within 5 banking days: A complete tender of the amount of the check (plus bank charges) erases criminal liability (Sec. 1, final proviso) but does not wipe out civil liability for consequential damages.
6. Penalties & Sentencing Trends
| Statutory Penalty (Sec. 1) | Range |
|---|---|
| Imprisonment | 30 days – 1 year for each count |
| Fine | Up to double the amount of the check, but not > ₱200,000 per count |
The Supreme Court, via Administrative Circular 12-2000 (as amended by 13-2001 & 13-A-2001), strongly urges trial courts to impose a fine alone—especially for first-time, non-fraudulent offenders—unless aggravating circumstances justify jail time. Nonetheless, imprisonment remains legally available, and many appellate decisions have affirmed custodial sentences when the amounts are large, notices were ignored, or the accused showed bad faith.
7. Common Defenses (and Why They Often Fail)
| Claimed Defense | Viability |
|---|---|
| “The check was post-dated only as collateral.” | Fails. BP 22 covers security checks. |
| “I forgot my account was closed.” | Rarely succeeds; closure = presumption of knowledge. |
| Partial payment within five days. | Insufficient; the law requires full payment. |
| No written notice reached me. | Valid if the prosecution cannot prove both service and actual receipt. |
| Settlement after the five-day period. | May mitigate penalty or lead to civil compromise, but does not erase criminal liability already attached. |
8. BP 22 vs. Estafa by Post-Dated Check (Art. 315 §2[d], RPC)
| Feature | BP 22 | Estafa (RPC) |
|---|---|---|
| Nature | Malum prohibitum (public offense) | Malum in se (requires deceit) |
| Element of Deceit/Fraud | Not required | Essential |
| Payment Within 5 Days | Absolves criminal liability | Merely a mitigating circumstance |
| Double Jeopardy | Accused may be charged with both, but cannot be convicted of both for the same act & same check. Courts must acquit of one if convicted of the other. |
9. Procedure & Venue Highlights
- Venue: Where the check was drawn, issued, delivered, or dishonored.
- Institution of civil action: Automatically included unless expressly waived (Rule 111).
- Arrest & Bail: Warrant issued after finding of probable cause; bail generally discretionary and often fixed in an amount equal to, or slightly above, the check value.
- Plea to Lesser Offense / Fine Only: Possible under Circulars 12-2000 & 13-2001, but requires prosecution and court approval.
10. Prescription
BP 22 is a special law; four (4) years prescription under Act No. 3326 applies. The clock starts after the 5-day grace period (i.e., when the offense is deemed consummated). Filing a complaint with the barangay or prosecutor interrupts prescription.
11. Corporate & Partnership Checks
- The signatory officer is personally liable; the corporation itself may also be indicted if the check bears its name.
- People v. C.A. (2010): liability does not automatically attach to every director; only those who signed or authorized the issuance are answerable.
- Banks may require corporate resolutions; failure to secure authority does not absolve the signatory from BP 22 if the check bounces.
12. Civil Liability and Restitution
Regardless of criminal outcome, the drawer may be adjudged to:
- pay the face value plus legal interest (6 % → 12 % depending on the period)
- reimburse protest fees, penalties, and litigation costs
- shoulder moral or exemplary damages upon proof of bad faith
Many courts now encourage judgment based on compromise (Rule 130, Sec. 29) to expedite restitution.
13. Key Supreme Court Decisions (Selected)**
| Case | G.R. No. | Key Doctrine |
|---|---|---|
| Lozano v. Martinez | L-63419 (Oct 30 1986) | BP 22’s validity & coverage of security checks. |
| Vaca v. CA | 131714 (May 28 1999) | Written notice requirement is jurisdictional. |
| Dico v. Court of Appeals | 101163 (Feb 7 1994) | Presumption of knowledge; effect of bank stamp. |
| UEB v. People | 20120 (Apr 15 2015) | Corporate officer’s personal liability. |
| Domagsang v. People | 182325 (June 27 2012) | Continuous offense theory rejected; prescription clarified. |
| Colar v. People | 181084 (Aug 17 2010) | Registry-mail notice admitted as sufficient. |
(The list is representative, not exhaustive.)
14. Practical Compliance Tips for Business & Individuals
- Verify account status before issuing any post-dated check—especially if you plan to close the account.
- Document payments: if you settle within five banking days, demand a written receipt acknowledging full satisfaction.
- Respond to demand letters promptly; silence strengthens the inference of bad faith.
- Keep copies of all security agreements and correspondence; they may bolster a good-faith defense or help negotiate a compromise.
- Avoid “cycling” checks (issuing new checks to cover old ones); repeated counts magnify exposure.
15. Conclusion
A check issued on an already closed account—even if labeled a mere security—squarely fits the mischief targeted by BP 22. Because closure renders funds non-existent, the law deems the drawer aware of insufficiency; the prosecution’s burden is correspondingly lighter, save for the still-indispensable written notice of dishonor.
While courts increasingly favor fines and restitution over incarceration, the stigma and potential imprisonment remain real. Prudent account management, immediate response to demand letters, and full payment within the statutory five-day window are the surest shields against both criminal liability and the economic fallout of a bouncing check case.