Monday, August 06, 2001

Noted Supreme Court Decision on Bouncing Checks

If you are contemplating on suing someone for issuing you a bad check, take a tip. Notify the issuer in writing that her check bounced and that she has five (5) banking days to replace the same with cash. This is the lesson that the Supreme Court teaches in the recent case (Danao v. Court of Appeals G.R. No, 122353 June 6, 2001). In this case, the Supreme Court ruled that the failure of a party to give a notice of dishonor to an issuer of a bounced check relieves the issuer from liability under the Bouncing Checks Law or Batas Pambansa Blg. 22.

This is common misconception among non-lawyers. Liability under the Bouncing Checks Law does not arise simply upon the return of the check for lack of funds. It is equally important that the issuer is notified of the return of the check and is given five (5) banking days from receipt of notice to pay the amount of the check.

For this purpose, there must be a clear evidence of receipt of the notice. If sent by personal service, the evidence may be in the form of a written acknowledgement. If sent by registered mail, the evidence is the return card that should state when the notice was received. Without the foregoing evidence of receipt, the issuer of a bounced check may be able to escape liability as held in the case of Danao.

Thus, before you ask your lawyer to file the case for violation of the Bouncing Checks Law, be sure to comply with the foregoing requirement. If your lawyer misses out on it too, you may end up not only with a bouncing check but also with an order for the dismissal of your case.

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