SC Holds Jacinto Liable for B.P. 22 Violations

Added: (Tue Aug 24 2010)

Pressbox (Press Release) - Manila, Philippines. 17 August 2010—Famous guitarist/singer/businessman Ramon “RJ” Jacinto was held liable for violating B.P. 22, otherwise known as the “Anti-Bouncing Checks Law” in the 3 August 2010 decision of the Supreme Court in Land Bank of the Philippines vs. Jacinto, G.R. No. 154622.
The Philippine Supreme Court ruled that the Restructuring Agreement entered into by Land Bank and Jacinto did not render ineffective the previous agreement entered into by the parties. Said ruling primarily hinged on the following provision expressly stated in the Agreement: “This Agreement shall not novate or extinguish all previous security, mortgage, and other collateral agreements, promissory notes, solidary undertaking previously executed by and between the parties and shall continue in full force and effect modified only by the provisions of this Agreement (Land Bank of the Philippines vs. Jacinto, G.R. No. 154622, 3 August 2010).”
Therefore, the bouncing checks previously issued by Jacinto in compliance with the old agreement are still with full force and effect. The High Court further stresses that even without delving on the issue of novation, Jacinto can still be held liable for violations of B.P. 22 for issuing those post-dated checks that were refused payment by the bank due to the following reasons: a) payment stopped; and b) insufficiency of funds (ibid).
B.P. 22 punishes the mere act of issuance of checks that are subsequently dishonored. It does not take into consideration the intention of the issuer; thus, even those issued for accommodation cannot escape liability. The rationale for this rule lies in the fact that the offense is a malum prohibitum, that is, prohibited by express mandate of the law, not because of its inherent nature. In offenses of this type, good faith is not a defense.
The elements of the offense under B.P. 22 are as follows: 1) the making, drawing, and issuance of any check to apply on account or for value; (2) 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 the check in full upon its presentment; and (3) the 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 (ibid). The element of knowledge in number 2 is presumed from the dishonor of the check.
Indeed, this recent decision of the High Court is another word of caution that the public must constantly bear in mind. Checks must be properly funded before making any issuances.
For further information on B.P. 22, log on to www.manila-legal.com.