Premature notice

One of the essential elements of the violation of the Bouncing Checks Law is knowledge of insufficiency of funds at the time of the issuance of the check. Since such knowledge is hard to prove as it entails probing into the mind of the issuer, the law creates a prima facie evidence that when the check is presented within 90 days from its date and it is dishonored, the drawer is presumed to have knowledge of insufficiency of funds if he is notified of such dishonor and he did not redeem or make good the check within five days from notice. The notice must be in writing and must be received by the issuer. If there is no proof of such receipt, the presumption does not arise. This rule is again illustrated in the case of Jimmy who issued three checks to settle his credit card account with Equitable Card Network Inc. (ECN).

The last of the three checks issued by Jimmy was Far East Bank and Trust Co. (FEBTC) Check No. 369404 dated June 12, 1993 in the amount of P200,000 payable to ECN. This check was deposited by ECN on June 14, 1993. And like the two other checks it was also dishonored for the reason "account closed". So it became the subject of another criminal case for violation of the Bouncing Checks Law which ECN filed against Jimmy in the Municipal Trial Court (MTC).

In the course of the trial, this dishonored check was marked as Exhibit "C" for the prosecution. As proof of notice of dishonor, the prosecution presented the letter of counsel of ECN asking Jimmy to make good the three checks he issued that includes this check Exhibit "C" within 5 days from receipt thereof, otherwise criminal charges for violation of Bouncing Checks Law will be filed against him. In other words for the three dishonored checks issued by Jimmy he received only one letter. And this letter was dated June 8, 1993. On the basis of this evidence, the MTC again convicted Jimmy of the crime of violation of the Bouncing Checks Law and ordered him to indemnify ECN the sum of P200,000. Was the MTC correct in convicting Jimmy of violation of the Bouncing Checks Law?

No. A notice of dishonor received by the maker or drawer of the check (Jimmy in this case) is indispensable before a conviction can ensue because the presumption of knowledge of insufficiency of funds on his part is brought into existence only after he had received such notice and he failed to pay the amount of the check or make arrangements for its payment within five days. The notice of dishonor may be sent by the offended party (ECN) or the drawee bank (FEBTC). The notice must be in writing. A mere oral notice to pay a dishonored check will not suffice. The lack of a written notice is fatal to the prosecution. The requirement of notice, its sending to and its actual receipt by the drawer or maker of the check gives the latter the option to prevent criminal prosecution if he pays the holder of the check the amount due thereon, or makes arrangements for its payment in full within 5 days after receiving such notice. In this case the only notice received by Jimmy was that dated June 8, 1993 sent by the Counsel of ECN. But the same was received by Jimmy before the check’s maturity or due date on June 12, 1993 and the check was deposited or presented for payment on June 14, 1993. The demand letter was sent four days before the date of the check and six days before it was deposited. So Jimmy did not receive the notice contemplated by law. There was no valid notice of dishonor to speak of. Notice of dishonor denotes that a check has been presented for payment and was subsequently dishonored by the drawee bank. This means that the check must necessarily be due and demandable because only a check that has become due can be presented for payment and subsequently dishonored. A postdated check cannot be dishonored if presented for payment before its due date. The failure of ECN to send another letter demanding that FEBTC check no. 369404 be paid within 5 days prevents the prima facie presumption from arising. Absent such presumption, the burden shifts to the prosecution to prove that Jimmy had knowledge of the insufficiency of his funds at the time he issued the check. There is no evidence presented by the prosecution to this effect. Accordingly, Jimmy must perforce be acquitted for violation of the Bouncing Checks Law. But he must pay the P200,000 with 12 percent legal interest per annum from the filing of the information until finality of the decision, the total of which shall be subject thereafter to 12 percent per annum until fully paid (Dico vs. Court of Appeals G.R. 141669, February 28, 2005. 452 SCRA 441)

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