[Legal] US Dollar Checks and the Bouncing Checks Law

[lupuS]

Here's a question for lawyers.

It has become popular nowadays for local banks to offer US Dollar checking accounts. Since there is no local clearing facility for US Dollar accounts, these USD checks are drawn on foreign banks (typically, based in US or Guam).

Now, my understanding of the Bouncing Checks law is that this refers to checks drawn in pesos on Philippine banks.

So if a US Dollar check issued here bounces, does that constitute fraud under the Councing Checks Law?

[green grin]

he is still liable under b.p. 22 "bouncing checks law".

go, my son, and sue.

[blue babe]

hmmm all bp22 says is that the act to be punished is "making or drawing and issuing any check ... which is subsequently dishonored for insufficiency of funds" no mention was made of a currency or a situs of the act. the only other requisite is knowledge of such insufficiency at the time the check was issued. so i guess this would still apply to dollar accounts.

at the very least, you can sue for estafa under the revised penal code.

[KuyaDanny]

And estafa is a criminal offense, right? That means the guy who wrote the check can go to jail...

What if the check issuer were a corporation. Who is guilty of estafa? Can they put a corporation in jail?

[blue babe]

yes. estafa is a crime. and yes, he can be sent to jail for than.

corp's can also be liable for estafa, just the way they may be made liable for any other criminal offense. but it is practically impossible to put a corp in jail since a corp is really is not a real person. but it does act through agents who are often natural persons. these agents are normally its officers and directors. and they can be jailed for corporate acts if it can be proved that they acted with malice and bad faith.

[green grin]

first, you gotta get a real big jail, then...

seriously, bb is right. but only those officers and directors who perpetuated the criminal act are liable. how do we know if an officer or director was a perpetuator? this is one issue which is lititgated and adjudicated upon by the court.

[KuyaDanny]

So, "perpetuators" must be first determined by some process. They're not necessarily the ones who signed the rubber checks?

[green grin]

the presumption is the one of signed the check is liable. usually it is the president and treasurer who sign the check for the company.

ganito. for example a corporation issued a check that bounces, which was signed by messrs a & b. the payee sues the corporation for violation of b.p. 22 (a criminal offense). the complaint states that the defendant is "xyz corporation, mr. a (the president), mr. b (treasurer)." although the presumption of guilt is disputable, it would be difficult to defend the two.

(yuck, sama ng grammar! :lol :)

your thoughts, mr. senator?

[This message has been edited by green grin (edited 05-19-2000).]

[KuyaDanny]

"usually it is the president and treasurer who sign the check for the company."

Usually, but not always. In fact, if the company is big enough, these two people will be too busy to do such things, and will appoint other signatories.

In practical terms, one often does not know who the specific people are who signed the check. The names are often not indicated in print, and the signatures are illegible (artistic chicken scratching). Are you saying that in such cases, the president and treasurer are still liable?

[senator yak]

kd / gg: just to inform you, recent cases of the supreme court on the matter have acquitted certain officers of the corporation from liability under BP22. the common scenario would be that this officer (maybe the cashier) or any dupe does not have actual knowledge of the funds behind the check. in such case, when told by his/her superior to prepare a check and that persons signs, being the authorized signatory, he/she may not necessarily be liable for the bouncing check - caveat - but this is a matter of evidence which still has to be proven during trial.

kd: the signatory of the check is usually made liable for BP22. however, there are defenses that may be raised (as in the above). http://www.pinoyexchange.com/smokin.gif

[PUGSLEY]

Sirs/Madam: Just a suggestion .Wouldn't it be nice if you could tell us what's the difference of filing a case under PB 22 and under Estafa and if filing one precludes the filing of another? :)

[senator yak]

pugsly: i will try to summarize the topic as follows: BP 22 makes punishable the issuance of a worthless check - estafa on the other hand (Art. 315(d) of the Revised Penal Code) is a bit more complicated such that it pertains to the issuance of a check which bounces, but is attended by the following circumstances:

a) there is fraud
b) it does not pertain to a pre-existing obligation

Thus, if fraud is involved (and usually it is present in a single transaction), it is possible that there is estafa. Also, if the issuance of a check is made not on a pre-existing obligation (meaning, it was not issued in payment of a debt already incurred) then it is possible that there may be estafa.

Given the above, the filing of a BP22 case does not preclude the filing of an estafa case, provided the main elements of estafa (as stated above) are present. http://www.pinoyexchange.com/smokin.gif

I hope i had made it as simple as possible.

What do you say gg. do you have anything to add to this?

[green grin]

estafa with eggs? estafsilog.

nothing to add, senator yak. baka magulo ko pa yung explanation mo.

yung kay kuyadanny - the courts will determine the persons liable based on the evidence presented in court. it's not an automatic liability on the president and the treasurer. but you gotta admit, it is kinda hard to imagine that (at the very least) the treasurer would not be aware of the absence of funds while allowing checks to be issued.

the name of the signatory will have to be divulged by the corporation ("kay mang oscar yang pirmang yan, yung cashier namin sa binondo branch") unless they deny that their corporation issued it or if their defense is that mang oscar did not have authority to sign and issue checks.

remember that these cases are heard in court and they will look at the participation (knowledge of) or the probability of participation of these officers in the issuance of the bouncing check.

[KuyaDanny]

What is legal tender?

[blue babe]

legal tender: the money (bills and coins) approved in a country for the payment of debts, the purchase of goods, and toher exchanges for value

source: black's law dictionary.

here's a funny fact, small coins, like 1centavo until 25centavoes ata (if i'm not mistaken) are only legal tender until a particular amount (i'm not sure, but i think its P20) http://www.pinoyexchange.com/lol.gif wala lang... i thought this was funny... :D can someone verify the amounts? i know its in the civil code or something...

[KuyaDanny]

So US Dollars are technically not legal tender in the Philippines?

[green grin]

kuyadanny - yeah, u.s. dollars are considered legal tender.

bb - yeah. alam mo hindi ko na mahanap yun sa civil code. http://www.pinoyexchange.com/lol.gif but if i remember, it's something like 1 centavo coins are legal tender only up to 10 pesos, 5 centavo coins up to 20 pesos, 10 centavo coins up to 100 pesos.

[junh]

Originally posted by blue babe
yes. estafa is a crime. and yes, he can be sent to jail

corp's can also be liable for estafa, just the way they may be made liable for any other criminal offense.

I've heard some time ago that estafa is no longer a criminal offense! True??? If so, does anyone know any law(s) that replaced it to protect busineses from unscrupulous people?!?

[nicomachus]

Estafa is still a criminal offense, punishable with imprisonment and fine. This is also the case with BP 22. But in BP 22, a recent SC decision did not punish a 70 year old guy, who supposedly issued the bad check in good faith, with imprisonment. But that decision applies to that particular case only yata. BP 22 is still punishable with BP 22.

But then I'm not really sure about the penalties of BP 22.

Anyway, trivia lang. Did you know that if you eat in a restaurant and do not pay, it is considered estafa under Art. 315(d) and not theft?

[bagyoboy]

Is an official receipt required or is the returned check enough for me to file estafa?

[KuyaDanny]

A returned check is good enough evidence, as well as a certificate from your bank stating the reason the check was returned. At least that was all I needed to have several guys convicted.

Of course, being the slick guys they are, they have escaped law enforcement and are currently not imprisoned.

[bagyoboy]

KD: How did you produce evidence that there was fraud?

[KuyaDanny]

The cases involved my contracting for services which were never delivered, and the bouncing checks were the contractor's "repayment" of my deposit. So my lawyer also included the underlying contracts in her submissions.