Introduction to Batas Pambansa Blg. 22

Batas Pambansa Blg. 22 (BP 22), commonly known as the Bouncing Checks Law, is a Philippine statute enacted in 1979 to penalize the issuance of worthless checks and restore confidence in the use of negotiable instruments in commercial transactions. The law criminalizes the act of making or issuing a check that is subsequently dishonored by the drawee bank due to insufficient funds, lack of credit arrangements, or account closure. Violations of BP 22 are considered mala prohibita offenses, meaning they are wrong because they are prohibited by law, and intent to defraud is not necessarily required for conviction—mere issuance and dishonor under specified conditions suffice.

The law covers two main punishable acts under Section 1:

Issuing a check with knowledge of insufficient funds or credit, which is dishonored upon presentment.
Failing to maintain sufficient funds in the account to cover the check within 90 days from its date, leading to dishonor.

Penalties include imprisonment ranging from 30 days to one year, or a fine equivalent to double the amount of the check (but not less than P2,500 nor more than P200,000), or both, at the court's discretion. Additionally, civil liability for the face value of the check, plus damages, may arise independently.

In the context of closed-account checks—where the drawer's bank account has been terminated before or at the time of issuance—BP 22 treats such dishonor as equivalent to insufficiency of funds. This article explores the necessity of a demand letter (or notice of dishonor) as a prerequisite to filing a criminal complaint under BP 22 for these specific cases, drawing on the law's provisions, procedural requirements, and jurisprudence from the Philippine Supreme Court.

Elements of a BP 22 Violation

To establish a violation of BP 22, the prosecution must prove the following elements beyond reasonable doubt:

Issuance of the Check: The accused made, drew, and issued a check in payment of an account or for value.
Knowledge of Insufficiency: At the time of issuance, the accused knew that they did not have sufficient funds in or credit with the drawee bank to cover the check.
Dishonor Upon Presentment: The check was presented to the bank within 90 days from its date and was dishonored for insufficiency of funds, lack of credit, or account closure.
Failure to Pay After Notice: Prima facie evidence of knowledge arises if the issuer fails to pay or arrange payment within five banking days after receiving notice of dishonor.

The second element—knowledge—is often the crux of disputes, especially in closed-account scenarios. Section 2 of BP 22 provides a prima facie presumption: if the check is dishonored for insufficiency and the issuer does not pay within five banking days after notice, knowledge is presumed. This shifts the burden to the accused to rebut the presumption.

For closed accounts, the law explicitly states in Section 5 that "a check drawn against a closed account shall be considered as drawn against insufficient funds." This equates closure to insufficiency, but does not automatically dispense with the need for proving knowledge.

The Role of the Demand Letter or Notice of Dishonor

A demand letter, often serving as the notice of dishonor, is a written communication from the payee (or holder) to the drawer informing them of the check's dishonor and demanding payment within a specified period, typically five banking days as per BP 22. It usually includes details like the check number, amount, date of dishonor, and reason (e.g., "account closed").

Is It a Strict Prerequisite?

Contrary to common misconceptions, BP 22 does not explicitly mandate a demand letter as a jurisdictional requirement for filing a complaint. The law's text does not state that a case cannot be filed without it. However, in practice and based on jurisprudence, the notice of dishonor is crucial for several reasons:

Establishing Prima Facie Evidence: Without notice, the prosecution cannot invoke the statutory presumption of knowledge under Section 2. The burden remains on the prosecution to prove actual knowledge through other evidence, such as testimony that the accused was aware of the account closure at issuance.
Opportunity to Avoid Criminal Liability: The five-day grace period allows the issuer to make good on the check, potentially avoiding prosecution. If payment is made within this window, no violation occurs, as the law aims to encourage restitution rather than punishment.
Procedural Due Process: Sending notice ensures the accused is informed and given a chance to rectify, aligning with principles of fairness. Courts have dismissed cases where notice was not properly served or proven.

In closed-account cases specifically, some argue that knowledge is inherent—the drawer must know their account is closed, making notice superfluous. However, Supreme Court rulings clarify otherwise.

Supreme Court Jurisprudence on Notice for Closed-Account Checks

Philippine courts, guided by Supreme Court decisions, have consistently emphasized the importance of notice even in closed-account scenarios:

Lao v. Court of Appeals (G.R. No. 119178, 1997): The Court held that notice of dishonor is essential to prove the element of knowledge. Without it, the presumption does not arise, and conviction may fail if actual knowledge is not established. This applies to closed accounts, as closure does not automatically imply deceit without opportunity for payment.
Rico v. People (G.R. No. 137197, 2002): Reinforcing Lao, the Court acquitted the accused due to insufficient proof of notice receipt. It stressed that even for closed accounts, the drawer might have closed the account inadvertently or believed funds were transferred. Notice affords due process and triggers the five-day period.
Domagsang v. Court of Appeals (G.R. No. 139292, 2000): Here, the Court noted that for closed accounts, the issuer's knowledge can sometimes be inferred from circumstances (e.g., voluntary closure), but still upheld the need for notice to activate the presumption. Absence of notice weakens the case but does not bar filing if other evidence of knowledge exists.
Yu Oh v. Court of Appeals (G.R. No. 125297, 2003): The Court clarified that notice must be personally received by the drawer or their authorized representative. Constructive notice (e.g., via registered mail without proof of receipt) is insufficient. In closed-account contexts, this ruling underscores that presumption relies on actual notice.
More Recent Rulings: In cases like People v. Ojeda (G.R. No. 104901, reiterated in later decisions), the Court has maintained that while BP 22 is a strict liability law, the notice requirement ensures the offense is not prematurely criminalized. For corporate issuers, notice must go to the responsible officer.

Exceptions exist where knowledge is overwhelmingly proven without reliance on presumption, such as admissions by the accused or documentary evidence of intentional closure post-issuance. However, these are rare, and prosecutors typically include proof of notice to strengthen complaints.

Procedure for Filing a BP 22 Complaint

Filing a BP 22 case involves preliminary steps, where the demand letter plays a pivotal role:

Presentment and Dishonor: Deposit the check within 90 days. Obtain a bank stamp or certification of dishonor stating "account closed."
Send Notice of Dishonor: Via registered mail, personal delivery, or other means ensuring proof of receipt. Include demand for payment within five banking days.
Wait for Grace Period: If no payment after five days, proceed to file.
File Complaint: Submit an affidavit-complaint with the Office of the City or Provincial Prosecutor, attaching the check, dishonor proof, notice, and evidence of non-payment. The prosecutor conducts a preliminary investigation to determine probable cause.
Court Proceedings: If indicted, the case goes to the Metropolitan Trial Court (MeTC), Municipal Trial Court (MTC), or Regional Trial Court (RTC) depending on the penalty. BP 22 cases fall under summary procedure.

Without a demand letter, the prosecutor may find no probable cause due to lack of presumption, leading to dismissal. However, if actual knowledge is alleged and supported (e.g., via witnesses), filing is possible, though risky.

Consequences of Not Sending a Demand Letter

Evidentiary Challenges: Prosecution must rely on circumstantial evidence, such as bank records showing closure before issuance or the accused's statements, which may not suffice for conviction.
Possible Acquittal: Courts often acquit if notice is absent or improperly served, as seen in numerous decisions.
Civil vs. Criminal: Even without criminal liability, the payee can pursue civil recovery for the check's value under the New Civil Code (e.g., action for sum of money).
Estafa Distinction: Unlike BP 22, estafa under Article 315 of the Revised Penal Code requires deceit and damage, where demand is not always needed but helps prove intent. BP 22 can coexist with estafa, but acquittal in one does not bar the other.

Defenses and Mitigations

Accused parties can raise defenses like:

Lack of notice, rebutting the presumption.
Payment within the grace period.
Novation (e.g., replacement of check with new obligation).
Absence of knowledge (e.g., account closed by bank error).
Check not issued for value (e.g., accommodation check).

For closed accounts, proving the closure occurred after issuance or was unknown can be key.

Administrative Circular 12-2000 and 13-2001 allow courts to impose only fines in BP 22 cases to decongest jails, but this is discretionary.

Practical Advice and Considerations

In practice, always send a demand letter before filing to maximize chances of recovery or successful prosecution. It serves as strong evidence and may prompt settlement, avoiding lengthy litigation. Consult a lawyer to draft the notice properly, ensuring it complies with rules on service.

For payees, document everything: keep originals of checks, bank certifications, and postal receipts. For issuers, maintain records of account status and respond promptly to notices.

BP 22 remains a vital tool against check fraud, but its application for closed-account checks highlights the balance between deterrence and fairness. While not an absolute prerequisite, the demand letter is indispensable for a robust case, as consistently affirmed by jurisprudence. Understanding these nuances ensures informed navigation of the legal landscape.