To be liable for violation of the Bouncing Checks Law (B.P. 22), the prosecution must prove that the drawer or issuer of the bad check knows at the time of the issuance that he or she does not have sufficient funds in, or credit with, the drawee bank for the payment of the check in full upon its presentment. Since the element of “knowledge” involves a state of mind, the law creates a prima facie presumption of such knowledge if the prosecution proves that check is presented for payment within 90 days from its date and that the drawer or maker receives a notice of dishonor and failed to satisfy the amount of the check or arrange for its payment within five banking days from such notice. In this particular case of Martin, arrangement for the payment of the bad checks he issued was made even before he received the notice of dishonor, will he still be criminally liable under the Bouncing Checks Law?
Martin was the executive vice president of a travel and tour company (MTT). For the importation of four tourist buses with a total value of $430,000 (or close to P10 million at the then prevailing rate of exchange), MTT was granted by a bank, a 60-day Usance Letter of Credit (LC).
As a condition for the grant of the LC, MTT issued six postdated checks of P716,666.66 or a total of P4,300,000 signed by Martin, to cover the subsequent drawings against the LC by the supplier. Thereafter the bank issued the LC in favor of the supplier which was to mature in October 1991. Hence the tourist buses arrived in October 1990 and were delivered to MTT covered by Trust Receipts with the bank as entruster and MTT as entrustee.
Of the six checks that MTT issued the first five were cleared but not the last one dated January 1991. To settle the amount including the differential in the exchange rate, MTT issued 14 postdated checks of P198,428.42 signed by Martin payable every 15 days, the first to start on February 28, 1991.
Of the 14 checks, only the first five totaling P992,142.10 were honored. The other nine totaling P1,785,855.78 were dishonored. Apparently MTT suffered financial reverses, hence it availed of the provision in the trust receipt wherein in the event of default, the bank may cancel the trust and take possession of the trust property, sell them and apply the proceeds to the unpaid obligation. Thus MTT surrendered the buses estimated to be worth about P6.6 million to the bank which accepted them in mid 1991 and March 1992.
Subsequently on July 9, 1992, the bank still sent a letter to Martin demanding payment of the obligation covered by the trust receipts then amounting to P10,327,579.21 already. Despite the reply of Martin that there was no longer any obligation since MTT had already surrendered the buses, the bank still proceeded to file nine criminal information for violation of B.P. 22 against Martin for the nine bouncing checks he issued. Was Martin guilty?
No. It is true that as a general rule, only full payment at the time of presentment or during the five-day grace period from notice of dishonor could exonerate one from criminal liability and that subsequent payments can only affect the civil, but not the criminal liability. But to prevent the practice of presenting checks for payment even after the amount thereof had been paid, payment by the accused of the amount of the check prior to its presentment serves the same purpose and should therefore also exonerate the accused (Macalalag vs. People 511 SCRA 400).
The Bouncing Checks Law was not designed to favor or encourage those who seek to enrich themselves through manipulation and circumvention of the purpose of the law. In the present case, the bank already exacted its proverbial pound of flesh by receiving and keeping in possession the four buses worth about P6.6 million and surrendered by Martin and MTT in mid 1991 and March 1992 pursuant to the provisions of the trust receipt. It thus appeared that the total amount of the dishonored checks—P1,785,855.75 which already included the mistaken agreement on the exchange differential, was more than fully satisfied prior to the transmittal and receipt of the letter of July 9, 1992 letter of demand. The payment of such dishonored checks obliterated the criminal liability of Martin (Tan vs. PCIB, G.R.152666, April 23, 2008).
Note: Books containing compilation of my articles on Labor Law and Criminal Law (Vols. I and II) are now available. Call tel. 7249445.
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E-mail at: jcson@pldtdsl.net