May an Indorser of a Check be Held Criminally Liable for Estafa or for the Violation of the Bouncing Checks Law? - Prof. Manuel Riguera

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May an indorser of a check be held criminally liable for estafa or for the violation of the Bouncing Checks Law (B.P. Blg. 22) if the check later bounces?

In Bautista v. Court of Appeals, G.R. No. 143375, 6 July 2001, the Court stated that an indorser who passes a bad check may be held liable under B.P. Blg. 22 if there was evidence that he was aware of the insufficiency of funds to cover the check at the time of his indorsement. A perusal of the case, however, shows that the statement was merely obiter since the accused therein was the drawer, not the indorser, of the check.

In Juaquico v. People, 5 March 2018, the Court held that the indorser could not be held criminally liable under Article 315(2)(d) of the Revised Penal Code because there was no showing of deceit. Implicit from Juaquico is that an indorser could be held liable under Article 315(2)(d) if deceit was proved. The accused was acquitted on the ground of reasonable doubt but was held civilly liable to the offended party.

My opinion is that an indorser of a check, as a rule, cannot be held criminally liable for estafa under Article 315(2)(d) of the Revised Penal Code or for the violation of B.P. Blg. 22, even if he knew of the insufficiency of the funds when he indorsed the check. This view is based on the text of both laws.

Article 315(2)(d) of the Revised Penal Code punishes any person who shall defraud another by postdating a check or issuing a check in payment of an obligation when the offender had no such funds in the bank, or his funds deposited therein were not sufficient to cover the amount of the check. The failure of the drawer of the check to deposit the amount necessary to cover the check within 3 days from receipt of notice from the bank and/or the payee or holder that the check has been dishonored shall be prima facie evidence of deceit constituting false pretense or fraudulent act.

B.P. Blg. 22 provides that any person who makes or draws and issues any check to apply on account or for value, knowing at the time of issue that he does not have sufficient funds in or credit with the drawee bank for the payment of the check; or who, having sufficient funds in or credit with the drawee bank when he makes or draws and issues a check, shall fail to keep sufficient funds or to maintain credit to cover the check if presented within a period of 90 days from the check’s date, for which reason the check is dishonored by the drawee bank shall be punished with imprisonment or fine, or both.

Under B.P. Blg. 22, the drawing and issuance of a check payment of which is refused by the drawee because of insufficient funds in or credit with such bank, when presented within 90 days from the date of the check, shall be prima facie evidence of knowledge of such insufficiency of funds or credit unless such drawer pays the holder thereof the amount due thereon, or makes arrangements for payment in full by the drawee of such check within 5 banking days after receiving notice that such check has not been paid by the drawee.

Either under Article 315(2)(d) of the Revised Penal Code or under B.P. Blg. 22, it is only the drawer or issuer who is liable for the crime. Both laws do not mention the indorser of a check. It is axiomatic that a criminal law is construed liberally in favor of the accused and that no person should be brought within the terms of a criminal statute who is clearly not within them. The obiter in Bautista was based on the deliberations in the legislature leading to the passage of B.P. Blg. 22. Whatever may have been said during the deliberations should not prevail over the text of the law, which punishes only the drawer or issuer.*

Even if we assume that an indorser could be prosecuted for estafa or for the violation of B.P. Blg. 22, as a practical matter it would be quite difficult to obtain a conviction since the prosecution cannot avail of the presumption of deceit or the presumption of knowledge of insufficiency of funds as these can be availed of only against the drawer or issuer.

The only instance when an indorser may be held criminally liable for estafa or the violation of B.P. Blg. 22 is if the indorser acted in conspiracy with the issuer of the check. Thus, in Ramos-Andan v. People, G.R. 136388, 14 March 2006, the Supreme Court held that the indorser of a check was liable for estafa under Article 315(2)(d) of the Revised Penal Code because the indorser acted in conspiracy with the drawer of the check in defrauding the offended party.

The Supreme Court has held that Article 8 of the Revised Penal Code on conspiracy may be applied in a suppletory manner to violations of B.P. Blg. 22, pursuant to Article 10 of the Revised Penal Code. Hence, an indorser may be held liable for the violation of B.P. Blg. 22 if he acted in conspiracy with the drawer (See Ladonga v. People, 451 SCRA 673, 683 [2005]).

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* Issue means the first delivery of an instrument, complete in form, to a person who takes it as holder (Sec. 191, Negotiable Instruments Law).

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Source -

https://legisperit.com/2022/10/30/may-an-indorser-of-a-check-be-held-criminally-liable-for-estafa-or-for-the-violation-of-the-bouncing-checks-law/