Worthless Checks Valid Debt BP 22 Applies Despite Payee Discrepancies

The Supreme Court has ruled that a person who issues a check that bounces cannot escape liability under Batas Pambansa Bilang 22 (B.P. 22) simply by claiming that the payee named on the check was not the intended recipient. In Narte v. Court of Appeals (G.R. No. 132552, July 14, 2004), the Court affirmed the conviction of two corporate officers for issuing worthless checks, clarifying that the law punishes the mere act of issuing a check that is subsequently dishonored, regardless of the circumstances surrounding the payee's identity.

The Facts of the Case

Claro Narte and Winston Cadhit were the general manager and maintenance manager, respectively, of Norphil Transport Corporation. In May 1994, the corporation purchased three air-conditioned buses from spouses Delia and Emilio Cabrera for ₱2,220,000.00. As payment, Narte and Cadhit issued ten postdated checks payable to "Emilio Cabrera."

When the checks were presented for payment, they were dishonored—one for insufficient funds and the rest because the account had been closed. Despite demand letters and promises to pay, the petitioners failed to settle their obligation.

The defense argued that the checks were mistakenly made payable to Emilio Cabrera, Jr., when the buses were actually registered in the name of Delia Cabrera. The petitioners claimed they requested the return of the checks for replacement but that the checks were instead given to Emilio Cabrera, Sr., who was not the intended payee.

The Issue

The central question was whether the discrepancy in the payee's identity—specifically, whether the checks were issued to the wrong Emilio Cabrera—negated the petitioners' liability under B.P. 22.

The Ruling

The Supreme Court denied the petition and affirmed the convictions. The Court emphasized that B.P. 22 makes the mere act of issuing a worthless check a crime—an offense classified as malum prohibitum, or wrong because it is prohibited by law, regardless of intent.

The Court cited its earlier ruling in Lazaro v. Court of Appeals (G.R. No. 105461, November 11, 1993), stating that the clear intention of the framers of B.P. 22 is to penalize the mere issuance of a check that is subsequently dishonored. The agreement surrounding the issuance of the checks need not be examined because the law itself provides that regardless of the parties' intent, the mere issuance of any kind of check that bounces makes the issuer liable.

The Court also addressed the issue of subsidiary imprisonment. It cited Administrative Circular No. 13-2001, which clarified that there is no legal obstacle to applying the Revised Penal Code's provisions on subsidiary imprisonment when only a fine is imposed and the accused cannot pay it.

Why This Matters

This decision reinforces the strict liability nature of B.P. 22. The law protects the integrity of checks as a medium of payment by holding issuers accountable for ensuring their checks are funded. Even if there are disputes about the underlying transaction—such as who the proper payee should be—the issuer of a bouncing check remains criminally liable.

Practical Takeaways

• Issuing a check carries absolute responsibility. A person who issues a check must ensure sufficient funds exist at the time of presentment, regardless of any disputes about the underlying transaction.
• Payee discrepancies are not a defense. If a check is issued to a wrong or unintended payee, the issuer cannot use this as a defense against B.P. 22 liability.
• B.P. 22 is a malum prohibitum offense. The prosecution does not need to prove criminal intent—only that the check was issued, that it was dishonored, and that the issuer knew of insufficient funds at the time of issuance.
• Subsidiary imprisonment may apply. If a court imposes only a fine and the convicted person cannot pay, subsidiary imprisonment may be imposed under the Revised Penal Code.
• Settle disputes separately. Issues about the validity of the underlying obligation should be resolved through civil remedies, not by withholding payment on a check that has already been issued.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.