The Supreme Court held in Cueme v. People that the intent behind issuing a bouncing check is irrelevant for violations of Batas Pambansa Blg. 22 (BP 22), also known as the Bouncing Checks Law. The mere act of issuing a check that is subsequently dishonored due to insufficient funds is sufficient to establish guilt, regardless of the issuer’s purpose or belief at the time of issuance. This ruling underscores the law’s strict liability nature, aimed at safeguarding public confidence in the banking system and commercial transactions by penalizing the issuance of worthless checks.

Loans, Blank Checks, and Bad Intentions: Can You Evade BP 22?

The case revolves around Felipa Cueme, who was found guilty of fifteen counts of violating BP 22. Helen Simolde, a bank teller, had befriended Cueme and lent her money, for which Cueme issued post-dated checks. When these checks were deposited, they bounced due to insufficient funds. Cueme argued she never intended the checks as payment, claiming Simolde procured blank checks to impress potential investors. The central legal question is whether Cueme’s alleged lack of intent to defraud shields her from liability under BP 22.

The Supreme Court affirmed the lower courts’ decisions, emphasizing that BP 22 is a special law that punishes the act of issuing a bouncing check, irrespective of the issuer’s intent. The Court highlighted the purpose of BP 22, referencing Lozano v. Martinez:

The effects of the issuance of a worthless check transcend (sic) the private interests of the parties directly involved in the transaction and touch (sic) the interest of the community at large. The mischief it creates is not only a wrong to the payee and holder but also an injury to the public. The harmful practice of putting valueless commercial papers in circulation, multiplied a thousand fold, can very well pollute the channels of trade and commerce, injure the banking system and eventually hurt the welfare of society and the public interest.

The Court explained that there are two ways to violate BP 22: issuing a check knowing there are insufficient funds, or failing to maintain sufficient funds to cover the check upon presentment. Cueme was convicted under the first type of violation. The determination of whether Cueme issued the checks as payment or for another purpose was deemed a factual question best resolved by the trial court, which had the advantage of observing witness credibility.

Regarding Cueme’s claim that she signed the checks in blank, the Court pointed out inconsistencies. Some checks bore her signature on the back, indicating endorsement, while alterations were countersigned. These actions suggested Cueme’s direct involvement in issuing the checks, undermining her defense. Furthermore, during the preliminary investigation, Cueme and her witness, Leonora Gabuan, made statements in their affidavits that contradicted their trial testimonies. This inconsistency further damaged their credibility in the eyes of the court.

The Court emphasized the principle of malum prohibitum, where the act itself is prohibited by law, regardless of criminal intent. People v. Reyes clarifies this point:

The law has made the mere act of issuing a bad check malum prohibitum, an act proscribed by the legislature for being deemed pernicious and inimical to public welfare. Considering the rule in mala prohibita cases, the only inquiry is whether the law has been breached. Criminal intent becomes unnecessary where the acts are prohibited for reasons of public policy, and the defenses of good faith and absence of criminal intent are unavailing.

Therefore, the Court reasoned, even if the checks were not intended for encashment, the act of issuing a dishonored check still constitutes a violation. To allow defenses based on the purpose or conditions of check issuance would undermine public trust in checks as currency substitutes, creating instability in commercial and banking sectors. The law does not distinguish between types of checks, and courts should not introduce such distinctions through interpretation.

The Court summarized the evidence against Cueme: the checks were complete, issued for loans, dishonored due to insufficient funds, and bank records confirmed the lack of funds. The presumption of knowledge of insufficient funds also applied. Once the maker knows that funds are insufficient, liability arises ipso facto. The court also agreed with the Court of Appeals’ modification of the penalty. Section 1 of B.P. Blg. 22 provides that the fine to be imposed on the offender shall be “not less than but not more than double the amount of the check, which fine shall in no case exceed Two Hundred Thousand Pesos (P200,000.00).

FAQs

What is the Bouncing Checks Law?	The Bouncing Checks Law, or BP 22, penalizes the issuance of checks without sufficient funds or credit to cover them. It aims to maintain public confidence in the banking system and commercial transactions.
What are the elements of a BP 22 violation?	The elements include making or drawing and issuing a check to apply on account or for value, knowing at the time of issue that the check is not sufficiently funded; and, by having sufficient funds in or credit with the drawee bank but failing to keep sufficient funds or to maintain a credit to cover the full amount of the check when presented to the drawee bank within a period of ninety (90) days.
Does intent matter under BP 22?	No, intent is generally irrelevant under BP 22. The law is malum prohibitum, meaning the act itself is illegal regardless of the issuer’s intentions or good faith.
What if a check was issued for a purpose other than payment?	Even if a check was issued for a purpose other than payment, such as for display to investors, the act of issuing a dishonored check still constitutes a violation of BP 22.
What is the penalty for violating BP 22?	The penalty includes imprisonment and a fine not less than, but not more than double the amount of the check, which fine shall in no case exceed Two Hundred Thousand Pesos (P200,000.00).
What happens if the affidavits and testimonies contradict?	Contradictory statements between affidavits and testimonies can significantly undermine a party’s credibility, affecting the court’s assessment of their overall case.
What is the significance of the term ‘malum prohibitum’?	‘Malum prohibitum’ refers to an act that is wrong because it is prohibited by law, not necessarily because it is inherently immoral. In such cases, criminal intent is not required for a conviction.
What is the presumption of knowledge of insufficient funds?	The law presumes that a check maker knows of the insufficiency of funds if the check is dishonored for that reason upon presentment. This shifts the burden to the maker to prove otherwise.

The Cueme v. People case serves as a reminder of the stringent application of BP 22. It highlights the importance of ensuring sufficient funds before issuing a check, as the law focuses on the act of issuing a bouncing check rather than the intent behind it.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: FELIPA B. CUEME, PETITIONER, VS. PEOPLE OF THE PHILIPPINES, RESPONDENT., G.R. No. 133325, June 30, 2000