People v.

Nitafan Facts:

G.R. No. 75954 October 22, 1992

On January 20, 1985, aid accused did then and there wilfully, unlawfully and feloniously make or draw and issue to Fatima Cortez Sasaki Philippine Trust Company Check No. 117383 in the amount of P143,000.00 He knew that at the time of issue he did not have sufficient funds in or credit with the drawee bank. The check was subsequently dishonored by the drawee bank for insufficiency of funds, and despite receipt of notice of such dishonor, said accused failed to pay Sasaki the amount of said check or to make arrangement for full payment of the same within five banking days after receiving said notice. Private respondent, Mariano Lim moved to quash the Information of the ground that the facts charged did not constitute a felony as B.P. 22 was unconstitutional and that the check he issued was a memorandum check which was in the nature of a promissory note in thus, is civil in nature. On 1 September 1986, respondent judge, ruling that B.P. 22 on which the Information was based was unconstitutional, issued the questioned Order quashing the Information. Hence, this petition for review on certiorari filed by the Solicitor General in behalf of the government.

Issues: Ratio: The constitutionality of the Bouncing Check Law has already been sustained by the SC through jurisprudence in Lozano v. Martinez, and the seven other cases decided jointly with it. A memorandum check is in the form of an ordinary check, with the word "memorandum", "memo" or "mem" written across its face, signifying that the maker or drawer engages to pay the bona fide holder absolutely, without any condition concerning its presentment. Such a check is an evidence of debt against the drawer, and although may not be intended to be presented has the same effect as an ordinary check and if passed to the third person will be valid in his hands like any other check. A memorandum check comes within the meaning of Sec. 185 of the Negotiable Instruments Law which defines a check as "a bill of exchange drawn on a bank payable on demand." A memorandum check must therefore fall within the ambit of B.P. 22 which does not distinguish but merely provides that "any person who makes or draws and issues any check knowing at the time of issue that he does not have sufficient funds in or credit with the drawee bank which check is subsequently dishonored shall be punished by imprisonment" A memorandum check, upon presentment, is generally accepted by the bank. Hence it does not matter whether the check issued is in the nature of a memorandum as evidence of indebtedness or whether it was issued is partial fulfillment of a pre-existing obligation, for what the law punishes is the issuance W/N B.P. 22 is unconstitutional W/N a memorandum check issued postdated in partial payment of a pre-existing obligation is within the coverage of B.P. 22.

itself of a bouncing check 15 and not the purpose for which it was issuance. The mere act of issuing a worthless check, whether as a deposit, as a guarantee, or even as an evidence of a pre-existing debt, is malum prohibitum.

Bank of America, NT and SA vs. Associated Citizens Bank G.R. No. 141001, May 21, 2009 Facts: BA-Finance Corporation granted Miller Offset Press, Inc. a credit line facility through which the latter could assign or discount its trade receivables with the former. The representatives of Miller (Uy Kiat Chung, Ching Uy Seng, and Uy Chung Guan Seng) executed a Continuing Suretyship Agreement with BA-Finance whereby they jointly and severally guaranteed the full and prompt payment of any and all indebtedness which Miller may incur with BA-Finance. Miller discounted and assigned several trade receivables to BA-Finance by executing Deeds of Assignment in favor of the latter. In consideration thereof, BA-Finance issued four checks payable to the order of Miller with the notation "For Payees Account Only." These checks were drawn against Bank of America. The four checks were deposited by Ching Uy Seng in Associated Citizens Bank with his joint account with Uy Chung Seng. Associated Bank stamped the checks and guaranteed all prior endorsements and/or lack of endorsements and sent them through clearing. Later, Bank of America as drawee bank honored the checks and paid the proceeds to Associated Bank as the collecting bank. When Miller failed to deliver to BA-Finance the proceeds of the assigned trade receivables, BA-Finance filed a collection suit against Miller and impleaded the three representative of the latter. Miller, Uy Kiat Chung, and Uy Chung Guan Seng filed a joint answer with cross-claim against Ching Uy Seng, wherein they denied that (1) they received the amount covered by the four Bank of America checks, and (2) they authorized their co-defendant Ching Uy Seng to transact business with BA-Finance on behalf of Miller. Uy Kiat Chung and Uy Chung Guan Seng also denied having signed the Continuing Suretyship Agreement with BA-Finance. BA-Finance filed an Amended Complaint impleading Bank of America as additional defendant for allegedly allowing encashment and collection of the checks by person or persons other than the payee named thereon. Ching Uy Seng did not file his Answer to the complaint. Bank of America filed a third party complaint against Associated Bank. In its answer to the third party complaint, Associated Bank admitted having received the four checks for deposit in the joint account of Ching Uy Seng and Uy Chung Guan Seng, but alleged that Ching Uy Seng, being one of the corporate officers of Miller, was duly authorized to act for and on behalf of Miller. RTC rendered judgment ordering Bank of America to pay BA-Finance the value of the four checks. CA affirmed the trial courts ruling with modification that Associated Bank should reimburse Bank of America. Hence this petition. Issues: Whether or not Bank of America is liable to pay BA-Finance and whether or not Associated Bank should reimburse Bank of America the amount of the four checks. Held: Yes. The bank on which a check is drawn, known as the drawee bank, is under strict liability, based on the contract between the bank and its customer (drawer), to pay the check only to the payee or the payees order. The drawers instructions are reflected on the face and by the terms of the check. When the drawee bank pays a person other than the payee named on the check, it does not comply with the terms of the check and violates its duty to charge the drawers account only for properly payable items. On the part of Associated Bank, the law imposes a duty of diligence on the collecting bank to scrutinize checks deposited with it for the purpose of determining their genuineness and regularity. The collecting bank being primarily engaged in banking holds itself out to the public as the expert and the law holds it to a high standard of conduct. In presenting the checks for clearing and for payment, the defendant [collecting bank] made an express guarantee on the validity of "all prior endorsements." Thus, stamped at the back of the checks are the defendants clear warranty. As the warranty has proven to be false and inaccurate, Associated Bank is liable for any damage arising out of the falsity of its representation.