For many years, checks, or the issuance thereof, have become a vital instrument for individuals, businesses, and other entities to facilitate a smoother flow of commercial transactions. This commercial innovation has made it easier for some individuals to secure a loan. However, since it is not really difficult to get hold of a check, it has also become susceptible to abuse. There are persons who knowingly issue worthless checks to secure or pay an obligation or for some other purposes. Consequently, these checks will bounce.
Although Estafa and B.P. 22 or the Bouncing Checks Law cases may originate from a similar set of facts, they, however, present different causes of action. Under the affected laws, these causes of action are considered distinct and independent from each other; thus, filing both Estafa and B.P. 22 against a person, arising from the same set of facts, does not necessarily violate the rule on double jeopardy. Estafa is a crime against property while a violation of B.P. 22 constitutes a crime against public interest.
Thus, Estafa and B.P. 22 may coincide. The former is committed when a person, employing any of the modes enumerated under Article 315 of the Revised Penal Code, defrauds another. One of the means of committing Estafa under Article 315 of the RPC is by deceit through the issuance of bouncing checks.
On the other hand, the violation of B.P. 22 is committed when the offender or the maker of the check issues the same with knowledge that the fund in the account to which the check will be drawn against is insufficient. Such knowledge of insufficiency of funds is presumed by the law.
In this article, we will explain further the differences between Estafa and B.P. 22 not only by defining them, but also by discussing the elements that constitute them respectively. Furthermore, we will also lay down practical examples and jurisprudence related to Estafa and B.P. 22.
What is the offense of Violation of Batas Pambansa Blg. 22?
A check, although technically not a legal tender, is nowadays used as a substitute for cash. The issuance of checks makes business dealings faster and more convenient. It allows for transactions, especially those involving large sums, to proceed without the need of physically giving money. However, this commercial instrument has been and is still being abused by certain individuals. Such actions have a negative impact on the integrity of banking and financial transactions in the country. This consequently becomes inimical to public interest.
The enactment of B.P. 22 or the Bouncing Check Law was a means for the government to address said issue and repress the practice of some people of issuing worthless checks or those that are dishonored when presented to the drawee bank.
Definition Under the law
B.P. 22 is a special law that makes the mere act of issuing worthless or bum checks a crime, mala prohibita, regardless if they were made as deposit, guarantee, or evidence of pre-existing debt. Thus, it penalizes the making, drawing, and issuance of checks that are subsequently dishonored by the drawee bank due to insufficiency of funds.
The law is broad enough to include, within its coverage, the making and issuing of a check by one who has no account with a bank, or where such account was already closed when the check was presented for payment. (Resterio v. People, G.R. No. 177438, [September 24, 2012], 695 PHIL 693-710)
Elements of the Offense
B.P. 22 punishes two acts, to wit: (1) the making or drawing and issuing a check knowing at the time of issuance that he does not have sufficient funds; or (2) the failure to keep sufficient funds or to maintain credit to cover the full amount of the check.
The elements that constitute the first punishable act under this law are the following:
- That a person makes or draws and issues any check to apply on account or for value;
- That the person knows 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 upon its presentment; and
- That the check is subsequently dishonored by the drawee bank for insufficiency of funds or creditor or would have been dishonored for the same reason had not the drawer, without any valid reason, ordered the bank to stop payment.
The elements that constitute the second punishable act under this law are the following:
- That a person has sufficient funds with the drawee bank when he makes or draws and issues a check;
- That he fails to keep sufficient funds to maintain a credit to cover the full amount if presented within a period of 90 days from the date appearing on the face of the check;
- That the check is dishonored by the drawee bank; and
- After receiving such written notice and demand refuses or fails to pay the value of the check within five (5) banking days.
It is to be noted that in the second punishable act under B.P. 22, the ninety (90) days provided therein is not one of the elements that constitutes the crime penalized thereunder. Pursuant to current banking practices, the reasonable time within which the maker, drawer, or issuer of the check has the duty to maintain a sufficient fund balance is 180 days or 6 months. However, the maintenance of sufficient funds for a period of 90 days under the law is essential in order to rebut the law’s presumption of knowledge of such insufficiency of funds to cover the check.
Thus, if a check was presented after 90 days but before 180 days from the date written on its face, and was dishonored on the ground that the maker, drawer, or issuer’s failure to maintain a sufficient balance, such maker, drawer, or issuer would still be liable for violation of B.P. 22.
X wanted to buy a car for a really long time. Since he could not afford to buy a brand-new car, he offered to buy one of Y’s car for P200,000.00. Y agreed to sell X his oldest car. Trusting his friend X, Y already delivered the car to the former in exchange for a dated check with the amount of P200,000.00. Since it is already 7 o’clock in the evening, Y was only able to encash said check on the following day after delivery of the car. However, upon presentment of the check to the drawee bank, the same was dishonored by reason of insufficiency of funds.
In this example, X committed a violation of B.P. 22 particularly the first mode of commission thereunder: that is the making or drawing and issuing of a check knowing at the time of issuance that he does not have sufficient funds. In this particular example, X may also be held liable for the crime of Estafa by means of deceit.
C is in the business of buying and selling palay. In order to avoid handling large sums of money and to reduce the probability of getting robbed, C never pays in cash. He only issues checks as payment for the palay he buys. F came to C’s palay buying station asking how much the latter would buy F’s palay. Seeing that the quality of said palay is good, C offered to pay F P18 per kilo. Not satisfied, F negotiated for a better price of P21 per kilo. C agreed to buy said palay for P3 above the current market price on the condition that the check he would issue F as payment would be dated three months after delivery of palay. Amenable to C’s proposal, F delivered his palay to C’s warehouse on April 1, 2021. In return, C issued to F a check post-dated on July 1, 2021. Although C’s account had sufficient funds when he issued F the said check, due to the poor management of his warehouse, a bulk of the palay he stored therein subsequently changed color and obtained a bad smell. Since C wanted to cut his loss, he sold the said palay for a price lower than the price for which he bought them. C even agreed to a later payment in exchange for the palay. Because of such loss, C’s account subsequently became insufficiently funded. Come July 1, 2021, F went to the bank for the encashment of the check issued by C. However, this was dishonored by the drawee bank because of insufficiency of funds. Furious of what just happened, F sent to C a demand letter for the payment of the value of the check that was dishonored. C promised to pay F the said amount; however, more than 5 banking days after receipt of the demand letter, C still failed to pay his obligation to F. In this example, C committed a violation of B.P. 22 particularly the second mode of commission thereunder; that is the failure to keep sufficient funds or to maintain credit to cover the full amount of the check.
In the case of People vs Chua, the Court held that NATY is liable under Batas Pambansa Blg. 22 for issuing four replacement checks. The law makes the mere act of issuing a worthless check punishable as a special offense. The gravamen of the offense under this law is the act of issuing a worthless check or a check that is dishonored upon its presentment for payment. The law has made the mere act of issuing a bum check a malum prohibitum, an act proscribed by legislature for being deemed pernicious and inimical to public welfare. It is undisputed that the four replacement checks in question were issued by NATY and that these were all dishonored due to insufficiency of funds. (People v. Chua, G.R. No. 130632, [September 28, 1999], 373 PHIL 962-976)
In the case of Tan vs Mendez, Jr., Petitioners were convicted for violation of BP Blg. 22. The present case is an appeal whereby petitioners alleged payment through compensation or offset to preclude their prosecution. The Court held in this case that Petitioner Marciano admitted that he drew the subject check as payment for the fuel and oil products of respondents. He knew at that time that there were no sufficient funds to cover the check because he had uncollected receivables. The check was thus dishonored upon presentment to the bank for payment. The law has made the mere act of issuing a bum check a malum prohibitum, an act proscribed by legislature for being deemed pernicious and inimical to public welfare. The gravamen of the offense under this law is the act of issuing a worthless check or a check that is dishonored upon its presentment for payment. Thus, even if there had been payment, through compensation or some other means, there could still be prosecution for violation of B.P. 22. We find that no reversible error was committed by the courts a quo in finding petitioners guilty of violation of B.P. 22. (Tan v. Mendez, Jr., G.R. No. 138669, [June 6, 2002], 432 PHIL 760-774)
In the more recent case of San Mateo vs People, the Court granted San Mateo’s petition for certiorari and acquitted her in this wise: Since there is insufficient proof that San Mateo actually received the notice of dishonor, the presumption that she knew of the insufficiency of her funds cannot arise. For this reason, the Court cannot convict her with moral certainty of violation of B.P. 22. Nevertheless, San Mateo’s acquittal does not entail the extinguishment of her civil liability for the dishonored checks. An acquittal based on lack of proof beyond reasonable doubt does not preclude the award of civil damages. For this reason, the trial court’s directive for San Mateo to pay the civil liability in the amount of P134,275.00 representing the total value of the 11 checks plus 12% interest per annum from the time the said sum became due and demandable until fully paid, stands. (San Mateo v. People, G.R. No. 200090, [March 6, 2013], 705 PHIL 630-640)
What is the felony of Estafa under the Revised Penal Code?
Estafa is also known as Swindling and is punishable in the Philippines as stated in the Revised Penal Code. Estafa can be committed by different forms, to wit: (1) Estafa with unfaithfulness or abuse of confidence; (2) Estafa by means of deceit; and (3) Estafa through fraudulent means. The penalty for Estafa was amended by RA 10951 wherein the basis for fines is the increased amount of fraud.
Definition under the law
Under Article 315 of the Revised Penal Code, Estafa or Swindling is defined as to be committed by any person who shall defraud another by any of the means mentioned hereinbelow shall be punished by:
With unfaithfulness or abuse of confidence, namely:
- Estafa with Unfaithfulness
- Estafa with Abuse of Confidence
- Estafa by taking undue advantage of the signature in blank
Estafa by means of Deceit:
- By using a fictitious name; By falsely pretending to possess power, influence, qualifications, property, credit, agency, or business or imaginary transactions; or By means of other similar deceits
- By altering the quality, fineness or weight of anything pertaining to his art or business
- By pretending to have bribed any government employee
- By postdating or issuing a check without having funds or having insufficient funds
- By obtaining any food, refreshment or accommodation without paying therefor, with intent to defraud; Obtaining credit at establishments by use of any false pretense; or By abandoning or surreptitiously removing any part of his baggage after obtaining credit, food, refreshment or accommodation therein without paying
Estafa through fraudulent means:
- By inducing another to sign any document
- By resorting to some fraudulent practice to ensure success in gambling
- By removing, concealing, or destroying documents
Elements of the Offense
In General, elements of Estafa or Swindling are: (1) The accused defrauded another by abuse of confidence or by means of deceit; (2) Damage or prejudice capable of pecuniary estimation is caused to the offended party or third persons; (3) Damage or prejudice may consist of: (a) the offended party being deprived of his money of property as a result of the defraudation; (b) disturbance of property rights; or (3) temporary prejudice.
For the first form of committing estafa which is the Estafa with unfaithfulness or abuse of confidence, it was further subdivided into three and let us discuss each of their elements for better understanding. For the Estafa with unfaithfulness, elements are: (1) The offender has an onerous obligation to deliver something of value; (2) He alters its substance, quantity or quality; and (3) Damage or prejudice capable of pecuniary estimation is caused to the offended party or third persons. On the other hand, for Estafa with abuse of confidence, elements are: (1) Money goods or other personal property be received by the offender in trust, or on commission, or for administration, or under any obligation involving the duty to make delivery of, or to return the same; (2) There be misappropriation or conversion of such money or property by the offender, or denial on his part of such receipt; (3) Such misappropriation or conversion or denial is to the prejudice of another; and (4) There be demand made by the offended party to the offender. Lastly, for Estafa by taking undue advantage of the signature in blank, elements are: (1) The paper with the signature of the offended party be in blank; (2) The offended party should have delivered it to the offender; (3) Above the signature of the offended party a document is written by the offender without authority to do so; and (4) The document so written creates a liability of, or causes damage to the offended party or any third person.
In the second form of Estafa or Swindling which is Estafa by means of deceit, it can be committed when the following requisite are present: (1) There must be a false pretense, fraudulent act or fraudulent means; (2) Such false pretense, fraudulent act or fraudulent means must be made or executed prior to or simultaneously with the commission of the fraud; (3) The offended party must have relied on the false pretense, fraudulent act, or fraudulent means, that is, he was induced to part with his money or property because of the false pretense, fraudulent act, or fraudulent means; and (4) As a result thereof, the offended party suffered damage.
For the last form of Estafa or Swindling, the Estafa through fraudulent means can further be committed in different manners. To discuss each, for Estafa by inducing another to sign any document to be committed, the following elements must be present: (1) That the offender induced the offended party to sign a document; (2) That deceit be employed to make him sign the document; (3) That the offended party personally signed the document; and (4) The prejudice be caused. Another is Estafa by removing, concealing or destroying documents, it is present when: (1) There be court record, office files, documents or any other papers; (2) The offender removed, concealed, or destroyed any of them; and (3) The offender had intent to defraud another.
X borrowed Y’s white car for the former’s wedding this coming weekend. When the date passed and came Monday, Y asked X for the return of his car. X does not return the white car and sells it to another person to add his pocket money for his honeymoon. A committed the crime of Estafa, specifically the first form which is Estafa with unfaithfulness or abuse of confidence (Article 315 No. 1, RPC).
C purchases iPhone 12 Pro Max worth P70,000 from D. C issues a check in payment of the item he bought. D agrees and allows C to take the phone home. If the check bounces, C may be liable for Estafa, particularly the Estafa by means of deceit (Article 315 No. 2, RPC). Suppose that before the check was encashed, C takes it back and issues a different check and when the later check was encashed, the account did not have sufficient funds. The crime now will fall under BP 22 because the later check was issued for payment of a pre-existing debt.
The crime of Estafa or Swindling was mentioned in strings of jurisprudence under the Philippines. Some of which are as follows.
In People v. Reyes, the Court ruled that for Estafa under the above provision to prosper, the issuance of the check must have been the inducement for the other party to part with his money or property, viz: “To constitute estafa under this provision, the act of postdating or issuing a check in payment of an obligation must be the efficient cause of the defraudation; as such, it should be either prior to or simultaneous with the act of fraud. The offender must be able to obtain money or property from the offended party because of the issuance of the check, whether postdated or not. It must be shown that the person to whom the check was delivered would not have parted with his money or property were it not for the issuance of the check by the other party. Stated otherwise, the check should have been issued as an inducement for the surrender by the party deceived of his money or property and not in payment of a pre-existing obligation.”
More recently, in People v. Tibayan, it has been held by the Supreme Court that the two incorporators of the Tibayan Group Investment Company, Inc. (TGICI) be convicted of multiple counts of Syndicated Estafa and sentencing them to life imprisonment for each count. “As in the other fraudulent investment schemes, the private complainants, in that case, were enticed to invest in TGICI due to the offer of high-interest rates, as well as the assurance that they will recover their investments. After parting with their monies, the private complainants received a Certificate of Share and post-dated checks, representing the amount of the principal investment and the corresponding monthly interest earnings. The checks, however, were dishonored upon encashment, and the TGICI office closed down without private complainants having been paid. The investors were then constrained to file criminal complaints against the incorporators and directors of TGICI.”
To differentiate the crime of Estafa from Theft, the Supreme Court made a discussion in the case of Ricafort v. Fernan: “In general, the crime of estafa is distinguished from that of theft by the manner in which the offender in each case acquires possession of the property. The estafador receives the possession of the property, while the thief takes, without the owner’s consent, the possession of the latter’s property. There are, however, instances where even if the property misappropriated was received by the offender, the misappropriation will constitute theft, and not estafa. In such cases, distinction should be made whether the offender, on receiving the property, acquired: (1) the material possession alone or (2) the material and juridical possession, or (3) the material and juridical possession plus the ownership of the property. Where only the material possession is transferred, conversion of the property gives rise to the crime of theft; where both material and juridical possessions are transferred, misappropriation of the property would constitute estafa; and where in addition to the material possession, the ownership of the property is transferred, misappropriation would only give rise to a civil obligation (People vs. Aquino, 36 Off. Gaz., 1886). For example, an agent of the public authorities who, in the performance of his duties, and because of the lack of registration papers, takes possession of cattle in the presence of the cattleman charged with the care thereof, without any opposition or protest on the part of said cattleman or on the part of the possessor or owner of the cattle seized and appropriating the value thereof to his own use, without reporting the case to his superior officers or to the competent authorities, constitute the crime of estafa (U. S. vs. Dacanay, Phil. 617).”
Estafa and Violation of Bouncing Checks Law, how do they differ?
In the Philippines, B.P. 22, commonly referred to as the Bouncing Checks Law, and Article 315 of the Revised Penal Code are the laws that penalize the issuance of bouncing checks and Estafa, respectively. Cases that violate these laws may narrate the same facts, they differ, however, with the causes of action.
B.P. 22 or the Bouncing Checks Law is a special penal law that penalizes the act of making, drawing, and issuance of a check without sufficient funds or credit. As discussed above, this law specifically punishes acts, to wit: (1) the making or drawing and issuing a check knowing at the time of issuance that he does not have sufficient funds; or (2) the failure to keep sufficient funds or to maintain credit to cover the full amount of the check. The violation of this law is a crime mala prohibita as the acts stipulated are prohibited by a special penal law.
Article 315 of the Revised Penal Code punishes the act of Estafa or swindling which is committed by any person by means of the following: (1) with unfaithfulness or abuse of confidence; (2) by means of false pretenses or fraudulent acts; or (3) through any fraudulent means. The specified means of committing Estafa laid down certain acts which further clarify the violation.
First, any person committing Estafa with unfaithfulness, with abuse of confidence, or by taking undue advantage of the signature in blank will be penalized under this law.
Furthermore, committing Estafa by means of false pretenses or fraudulent acts includes the use of fictitious name; falsely pretending to possess power, influence, qualifications, property, credit, agency, or business or imaginary transactions; altering the quality, fineness or weight of anything pertaining to his art or business; pretending to have bribed any government employee; postdating or issuing a check without having funds or having insufficient funds; or obtaining any food, refreshment or accommodation without paying therefor, with intent to defraud; obtaining credit at establishments by use of any false pretense; or by abandoning or surreptitiously removing any part of his baggage after obtaining credit, food, refreshment or accommodation therein without paying.
Lastly, inducing another, by means of deceit, to sign any document; resorting to some fraudulent practice to insure success in a gambling game; or removing, concealing or destroying, in whole or in part, any court record, office files, document or any other papers are the fraudulent acts which are also punishable.
Is bouncing check a criminal case in the Philippines?
B.P. 22 is a Special Penal Law. Thus, violation of which is essentially a crime against public interest because it degrades the integrity of the country’s banking and financial system. However, like other crimes, there also exists a civil aspect to it. Although violation of this law constitutes a crime, acquittal of the accused based on reasonable doubt does not necessarily extinguish his civil liability to the other party.
Bouncing check, as a general rule, constitutes a crime that is punished either by estafa under Article. 315 of the RPC or by B.P. 22 or by both. However, under B.P. 22, once a check bounces and the drawer or maker was informed of such dishonor of the check through a written notice and there is proof that he received said notice, he is given the chance to pay the value of the check within 5 banking days from his receipt of the notice. In such a case, the payment of the value of the said check before the filing of the criminal charge is valid defense on the part of the drawer or maker.
How much is the penalty for bounced checks in the Philippines?
B.P. 22 or the Bouncing Checks Law provides the penalty for bounced checks in the Philippines. Any person who will be found liable for bouncing checks shall be penalized with imprisonment of not less than 30 days but not more than 1 year, or by a fine of not less than but not more than double the amount of the check, which fine shall not exceed P200,000.00, or both such fine and imprisonment at the discretion of the court.
What will happen to bounced checks?
Bounced checks are stamped by the bank indicating such insufficiency of funds against which the checks were drawn. These checks can be presented for encashment again to the drawee bank or redeposited to any bank for up to three times. However, upon the check’s dishonor for the third time due to insufficiency of funds, it cannot be redeposited anymore and becomes totally worthless.
The bounced checks serve as pieces of evidence material to the filing of a criminal case against the maker, drawer, or issuer of such checks as the case may be. They also serve as basis for the penalty to be imposed upon the accused if he is found guilty beyond reasonable doubt by the court, as well as to determine the amount of the accused’s civil liability. As previously mentioned, however, even if the accused is acquitted based on reasonable doubt, he may still be held civilly liable.
How do you prove Estafa?
Any person may be liable for committing the crime of Estafa if he defrauds another by any means provided under Article 315 of the Revised Penal Code.
In the case of People vs. Juego (298 SCRA 22, 33 (1998)), the elements of the crime of Estafa are: 1) there must be a false pretense, fraudulent act or fraudulent means; 2) such false pretense, fraudulent act or fraudulent means must be made or executed prior to or simultaneously with the commission of the fraud; 3) the offended party must have relied on the false pretense, fraudulent act, or fraudulent means, that is, he was induced to part with his money or property because of the false pretense, fraudulent act, or fraudulent means; and 4) as a result thereof, the offended party suffered damage.
Can you be jailed for Estafa?
Yes, a person can be imprisoned if he will be found liable for committing Estafa.
Article 315 of the Revised Penal Code provides the penalty for the crime of Estafa. The law provides four classifications of penalty for the crime.
First, the penalty of prision correccional in its maximum period to prision mayor in its minimum period, if the amount of the fraud is over 12,000 pesos but does not exceed 22,000 pesos, and if such amount exceeds the latter sum, the penalty provided in this paragraph shall be imposed in its maximum period, adding one year for each additional 10,000 pesos; but the total penalty which may be imposed shall not exceed twenty years. In such cases, and in connection with the accessory penalties which may be imposed under the provisions of this Code, the penalty shall be termed prision mayor or reclusion temporal, as the case may be.
Second, the penalty of prision correccional in its minimum and medium periods, if the amount of the fraud is over 6,000 pesos but does not exceed 12,000 pesos.
Third, the penalty of arresto mayor in its maximum period to prision correccional in its minimum period if such amount is over 200 pesos but does not exceed 6,000 pesos.
Fourth, by arresto mayor in its maximum period, if such amount does not exceed 200 pesos, provided that fraud be committed by (1) with unfaithfulness or abuse of confidence; (2) by means of false pretenses or fraudulent acts; or (3) through any fraudulent means.
However, these amounts have been recently amended by Section 85 of Republic Act N0. 10951.