The Supreme Court affirmed that issuing a bouncing check, even if it’s meant as a form of debt or guarantee, can lead to criminal charges under Batas Pambansa (BP) Bilang 22. The Court underscored that the primary aim of BP 22 is to ensure the stability of checks as a substitute for currency. Celia M. Meriz was found guilty after issuing checks that were dishonored due to insufficient funds. The court held that the intent behind issuing the check doesn’t matter; what counts is the act of issuing a check that bounces, which is a violation of the law.

When Business Deals Lead to Bouncing Checks: Can Intent Save You from Liability?

Celia M. Meriz, a garment manufacturer, found herself in legal trouble after her business, Hi-Marc Needlecraft, faced financial difficulties. She had taken out loans from Amelia Santos and Summit Financing Corporation, issuing several Pilipinas Bank checks to Santos as part of their transactions. However, these checks bounced due to insufficient funds, leading to criminal charges under Batas Pambansa Bilang 22, also known as the Bouncing Checks Law. The central legal question was whether Meriz’s intent, or lack thereof to defraud, could excuse her from criminal liability given the circumstances of the bouncing checks.

The facts revealed that after the checks were dishonored, Santos sent a telegram and a demand letter to Meriz, urging her to settle her account. Meriz acknowledged the debt and requested more time to pay, but she failed to meet her obligations. Consequently, four informations were filed against her in the Regional Trial Court of Makati City, each corresponding to a dishonored check. At trial, Meriz pleaded not guilty, arguing that there was a lack of consideration for the checks and that she didn’t receive proper notice of dishonor.

The trial court, however, convicted Meriz on all counts, sentencing her to imprisonment and ordering her to indemnify Santos for the amount of each check. On appeal, the Court of Appeals affirmed the trial court’s decision. The Court of Appeals found that all the elements of BP 22 were present: Meriz issued the checks, knew she had insufficient funds, and the checks were subsequently dishonored. Undeterred, Meriz elevated the case to the Supreme Court, reiterating her arguments about the lack of consideration and improper notice.

The Supreme Court began its analysis by emphasizing a fundamental principle of statutory construction: penal statutes should be strictly construed against the state and liberally in favor of the accused. However, the Court clarified that this principle should not be used to shield an accused from criminal liability when the law has clearly been violated. The Court then outlined the essential elements of the offense penalized under BP 22, which are:

• The making, drawing, and issuance of any check to apply to account or for value;
• The knowledge of the maker, drawer, or issuer that at the time of issue he does not have sufficient funds in or credit with the drawee bank for the payment of such check in full upon its presentment; and
• Subsequent dishonor of the check by the drawee bank for insufficiency of funds or credit or dishonor for the same reason had not the drawer, without any valid cause, ordered the bank to stop payment.

The Court addressed Meriz’s argument about the lack of consideration by stating that the cause or reason for issuing the check is inconsequential in determining criminal culpability under BP 22. This means that whether the check was issued as payment for a debt, as a guarantee, or for any other reason, it is still subject to the provisions of the law. The Court quoted Cruz vs. Court of Appeals, 233 SCRA 301 saying that “a check issued as an evidence of debt, although not intended for encashment, has the same effect like any other check” and must thus be held to be “within the contemplation of BP 22.”

The Supreme Court further clarified that BP 22’s primary intention is to maintain the stability and commercial value of checks as substitutes for currency. The Court articulated:

BP 22 does not appear to concern itself with what might actually be envisioned by the parties, its primordial intention being to instead ensure the stability and commercial value of checks as being virtual substitutes for currency. It is a policy that can easily be eroded if one has yet to determine the reason for which checks are issued, or the terms and conditions for their issuance, before an appropriate application of the legislative enactment can be made. The gravamen of the offense under BP 22 is the act of making or issuing a worthless check or a check that is dishonored upon presentment for payment. The act effectively declares the offense to be one of malum prohibitum. The only valid query then is whether the law has been breached, i.e., by the mere act of issuing a bad check, without so much regard as to the criminal intent of the issuer.

This makes the offense one of malum prohibitum, meaning it is wrong because the law says so, regardless of intent. The critical question, therefore, is whether the law was violated by issuing a bad check. Furthermore, the element of “knowledge” of insufficient funds is presumed, as stated in Section 2 of BP 22:

Sec. 2. Evidence of knowledge of insufficient funds. – The making, drawing and issuance of a check payment of which is refused by the drawee bank because of insufficient funds in or credit with such bank, when presented within ninety (90) days from the date of the check, shall be prima facie evidence of knowledge of such insufficiency of funds or credit unless such maker or drawer pays the holder thereof 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.

To rebut this presumption, the issuer must pay the check amount within five banking days of receiving notice of dishonor. Failure to do so confirms the presumption of knowledge. Regarding the notice of dishonor, the Court noted that BP 22 does not prescribe specific contents for the notice, only that it be in writing.

The Court affirmed the findings of the lower courts that Meriz had received a telegram and a demand letter, and that she had acknowledged her liability in a reply letter, requesting an extension to settle her account. Based on these findings, the Supreme Court upheld Meriz’s conviction but modified the sentence. Instead of imprisonment, the Court imposed a fine of P94,200.00 for each case, along with the order to indemnify Santos for the amounts of the dishonored checks. This decision underscores the strict liability imposed by BP 22 and the importance of ensuring sufficient funds when issuing checks.

FAQs

What is Batas Pambansa Bilang 22 (BP 22)?	BP 22, also known as the Bouncing Checks Law, penalizes the making or issuing of a check with insufficient funds or credit, regardless of the intent behind it. Its purpose is to ensure the stability and commercial value of checks.
What are the essential elements of violating BP 22?	The essential elements include issuing a check for value, knowing there are insufficient funds at the time of issuance, and the subsequent dishonor of the check by the bank. Knowledge of insufficient funds is presumed if the check is dishonored and the issuer fails to pay within five banking days of notice.
Does the reason for issuing the check matter under BP 22?	No, the reason or consideration for issuing the check is inconsequential. Whether it’s for payment of debt, a guarantee, or any other reason, the issuer is still liable if the check bounces.
What is the significance of a “notice of dishonor”?	A notice of dishonor informs the issuer that the check has been dishonored due to insufficient funds. The issuer has five banking days from receiving this notice to pay the amount of the check and avoid criminal liability.
What should be included in the notice of dishonor?	The law only requires that the notice of dishonor be in writing. There are no specific contents prescribed by BP 22.
What is “malum prohibitum” and how does it relate to BP 22?	Malum prohibitum refers to acts that are wrong because they are prohibited by law, regardless of moral intent. BP 22 offenses fall under this category, meaning the act of issuing a bad check is punishable regardless of the issuer’s intent.
What happens if the issuer pays the check within five days of notice?	If the issuer pays the check amount or makes arrangements for payment within five banking days of receiving the notice of dishonor, the presumption of knowledge of insufficient funds is rebutted, and they may avoid criminal liability.
What was the outcome of the Celia M. Meriz case?	Celia M. Meriz was found guilty of violating BP 22. However, the Supreme Court modified the sentence from imprisonment to a fine of P94,200.00 for each case, along with the order to indemnify the complainant.

The Meriz case serves as a reminder of the stringent enforcement of BP 22 and the importance of ensuring sufficient funds when issuing checks. The decision reinforces the law’s objective of maintaining the integrity of checks as a reliable form of payment in commercial transactions.

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: CELIA M. MERIZ, VS. PEOPLE, G.R. No. 134498, November 13, 2001