Republic of the Philippines

Metropolitan Trial Court

Branch I
Manila, Metro Manila

BEN QUE.,
Complainant,

-versus-

HENRY CHAO.,
Respondent,

MEMORANDUM
For the Defendant

Defendant Henry Chao, through the undersigned counsel, unto this

Honorable court, respectfully state:

Preliminary Statement

This is a case of filed for the alleged violation of BP 22 or AN ACT

PENALIZING THE MAKING OR DRAWING AND ISSUANCE OF A CHECK
WITHOUT SUFFICIENT FUNDS OR CREDIT AND FOR OTHER PURPOSES. The
respondent is accused to have issued a bouncing check as a payment for the
loan that he has for the complainant. On hand, the respondent has the lack of
knowledge about the closure of the said account that is intended to pay for the
loan and acted in good faith by virtue of issuing to the complainant and thus
have acted with no intent of violating such law.
These allegations thrown upon the respondent would defeat the purpose of
the law and that is to serve justice for everyone and to be construed within its
spirit and enable to do that the accused must be acquitted for the allegations
of criminal acts done by him.

FACTS

On June 1, 2011, complainant lend a money to the defendant who was at the
time of the transaction is a Manager of Atlas Parts of P 50,000.00 with 5%
monthly interest, payable in (5) equal monthly installments of P 12,500.00. The
money will be used to pay for their stocks and payment for account payable.

On the same day, complainant ask for a check as collateral, but instead
the defendant gave 5 NOW (Negotiable Order of Withdrawal) slips as
collateral and the complainant gave the agreed amount of loan of the
defendant. However, on the same month, the defendant resigned from his
position as manager of the Atlas Parts. Upon checking by the complainant, the
NOW slips were dishonored by the bank because the account was already
closed.

Upon knowledge of the complainant, he directly ask the defendant that

he make good his commitment, being the signatory of the said dishonored
NOW slips. After the personal meeting of both party, the complainant sent
formal demand letter on the former office address on the defendant, giving
him (5) five days to make good his promise.

The complainant assumed that the formal demand letter was received
because the registered letter was not returned to him. But the defendant
denies the assumption of the complainant, that at the time when the formal
demand letter was sent to his office, he already resigned at his office.

The defendant did not received the formal demand letter because of the
fact that he already resigned and could not do anything more.

ARGUMENT

I.
That NOW (Negotiable Order of Withdrawal) can be considered as
check/negotiable instrument defined in the Act. No. 2031 or “The Negotiable
Instruments law.”

II.
That the defendant did not received any formal demand letter.

III.
The petition should be dismissed because the demand letter was not received
by the defendant.

IV.
That the defendant lacks of actual knowledge that the account was already
closed.
 DISCUSSION

I. That NOW (Negotiable Order of Withdrawal) can be

considered as check/negotiable instrument defined in the
Act. No. 2031 or “The Negotiable Instruments law.”

NOW or Negotiable Order of Withdrawal is defined in the manual of

regulation for banks as interest-bearing deposit accounts that combine the
payable on demand feature of checks and the investment feature of savings
accounts.
In the case of People v. Reyes it was held that:
“The fact that a NOW check shall be payable only to a specific
person, and not valid when made payable to "BEARER" or to "CASH" or when
indorsed by the payee to another person, is inconsequential. The same
restriction is produced when a check is crossed: only the payee named in the
check may deposit it in his bank account. If a third person accepts a cross
check and pays cash for its value despite the warning of the crossing, he
cannot be considered in good faith and thus not a holder in due course. The
purpose of the crossing is to ensure that the check will be encashed by the
rightful payee only. Yet, despite the restriction on the negotiability of cross
checks, we held that they are negotiable instruments.”

II. That the defendant did not received any formal demand
letter.
III. The petition should be dismissed because the demand letter
was not received by the defendant.
IV. That the defendant lacks of actual knowledge that the
account was already closed.

There can be no prima facie evidence of knowledge of insufficiency of

funds in the instant case because no notice of dishonor was actually sent to or
received by the petitioner.

Under the case of Lina Lim Lao v. C.A. the court dismissed the criminal
action because the petitioner did not receive a formal demand letter, by either
bank or the offended party:

“It has been observed that the State, under this statute, actually offers the
violator "a compromise by allowing him to perform some act which operates to
preempt the criminal action, and if he opts to perform it the action is abated."
This was also compared "to certain laws allowing illegal possessors of firearms
a certain period of time to surrender the illegally possessed firearms to the
Government, without incurring any criminal liability." In this light, the full
payment of the amount appearing in the check within five banking days from
notice of dishonor is a "complete defense." The absence of a notice of dishonor
necessarily deprives an accused an opportunity to preclude a criminal
prosecution. Accordingly, procedural due process clearly enjoins that a notice
of dishonor be actually served on petitioner. Petitioner has a right to demand
— and the basic postulates of fairness require — that the notice of dishonor be
actually sent to and received by her to afford her the opportunity to avert
prosecution under B.P. 22.”

Because no notice of dishonor was actually sent to and received by the

petitioner, the prima facie presumption that she knew about the insufficiency
of funds cannot apply. Section 2 of B.P. 22 clearly provides that this
presumption arises not from the mere fact of drawing, making and issuing a
bum check; there must also be a showing that, within five banking days from
receipt of the notice of dishonor, such maker or drawer failed to pay the holder
of the check the amount due thereon or to make arrangement for its payment
in full by the drawee of such check.

Although it was sent at the former office of the defendant, we cannot

disregard the fact that he did not received any formal demand letter because he
was not already part of the said company. As a mere employee who follows
instruction of his employer, he couldn’t do anything but to follow or perform
his lawful right or office. However, that doesn’t arise from the prima facie that
he had knowledge of the insufficiency of the NOW account, because he was only
a signatory. His signature is completely unnecessary for it serves no
fathomable purpose at all in protecting the employer from unauthorized
disbursements.

Hence, the presumption of having knowledge in the insufficiency of Bank

account is inapplicable to this case. Atlas Parts has no obligation to forward the
notice addressed to it to the employee concerned, especially because the
corporation itself incurs no criminal liability under B.P. 22 for the issuance of a
bouncing check. Responsibility under B.P. 22 is personal to the accused; hence,
personal knowledge of the notice of dishonor is necessary. Consequently,
constructive notice to the corporation is not enough to satisfy due process.

The court should protect everyone’s constitutional right of “due process.”

In the case of our client who did not receive any formal demand letter
personally, if he will be convicted of B.P. No. 22 then his constitutional right of
due process would be violated. It is also important to remember, that the actual
knowledge insufficiency is material to convict someone for the violation of B.P.
22.

Prayer

Wherefore, we ask the honorable court to acquit and drop the criminal
charges against the defendant.

Metro Manila, Manila 10 October 2019

 LR&C Law Firm
G/F LR&C Building, Emerald Ave
Ortigas, Pasig City, 1800
Email Address: LRClaw@gmail.com

By:

Raymund Joseph M. Camarillo

PTR 4332416A 12-24-19 CDO
IBP MIS. OR. 1010156 12-11-19 CDO
ROLL NO. 66339 12-23-19;
TIN 123-456-790-000

Mel Jude R. Labastida

PTR 8634482A 12-27-18 CDO
IBP MIS. OR. 1084156 12-21-18 CDO
ROLL NO. 61279 05-33-18;
TIN 123-456-789-000

Maria Choelie V. Ruiz

PTR 863386A 12-27-18 CDO
IBP MIS. OR. 1081426 12-22-18 CDO
ROLL NO. 666789 05-24-18;
TIN 123-456-791-000

Counsel for the Defendant