(This is a four-part discussion on Bouncing Checks. See the pages at bottom of post.)
What is the second element of the offense, i.e., knowledge of insufficiency of fund?
It’s presumed that the issuer knew that about the insufficiency of funds if, after 5 days from notice of dishonor, he fails to pay or make arrangement for the payment of the check. It must be proved that the accused was actually notified that the check was dishonored, and that he or she failed, within 5 banking days from receipt of the notice, to pay the holder of the check the amount due thereon or to make arrangement for its payment.
What is the 5-day grace period and why is this provided?
The debtor-accused has 5 days to make good the check or pay its value. The debtor may also make arrangements for the payment of the check (e.g., bank transfers) within the same period. The law gives the accused an opportunity to satisfy the amount indicated in the check to avoid a potential criminal case.
When does the 5-day period start to run?
The period starts to run from receipt of the notice of dishonor. This is why many debtors hide so that they won’t be served with a notice of dishonor.
What is the form of the notice of dishonor?
The notice of dishonor must be in writing. A mere oral notice to the drawer or maker of the dishonor of his check is not enough. Without a written notice of dishonor of the checks, there is no way of determining when the 5-day grace period would start and end.
Is the rule on written notice absolute?
A verbal and indirect notice, however, was found to be sufficient in a subsequent case. Myrna [the complainant] did not know the address of the accused. Myrna immediately informed Josefina [the “best friend of the accused] about the dishonored checks. Josefina told Myrna not to worry and repeated her assurance that the accused is her best friend and a good payer. Myrna tried to get the address from Josefina, but the latter refused and instead made the assurance that she will inform petitioner that the checks were dishonored.
It is clear that there was no written notice given to the accused. It is also clear that no notice, even a verbal notice, was given directly to the accused. Still, the court found that the verbal notice was sufficient.