WONG vs.

CA (Effects: Drawer)

Section 2 of B.P. Blg. 22 provides:

Evidence of knowledge of insufficient funds. -- The making, drawing and issuance of a check payment of
which is refused by the drawee because of insufficient funds in or credit with such bank, when
presented within ninety (90) days from the date of the check, shall be prima facie evidence of
knowledge of such insufficiency of funds or credit unless such maker or drawer pays the holder thereof
the amount due thereon, or makes arrangements for payment in full by the drawee of such check within
five (5) banking days after receiving notice that such check has not been paid by the drawee.

An essential element of the offense is knowledge on the part of the maker or drawer of the check of the
insufficiency of his funds in or credit with the bank to cover the check upon its presentment. Since this
involves a state of mind difficult to establish, the statute itself creates a prima facie presumption of such
knowledge where payment of the check is refused by the drawee because of insufficient funds in or
credit with such bank when presented within ninety (90) days from the date of the check. To mitigate
the harshness of the law in its application, the statute provides that such presumption shall not arise if
within five (5) banking days from receipt of the notice of dishonor, the maker or drawer makes
arrangements for payment of the check by the bank or pays the holder the amount of the check.

Under Section 186 of the Negotiable Instruments Law, a check must be presented for payment within a
reasonable time after its issue or the drawer will be discharged from liability thereon to the extent of
the loss caused by the delay. By current banking practice, a check becomes stale after more than six (6)
months,[23] or 180 days.

AREZA vs. EXPRESS BANKING (Collecting Bank)

A depositary/collecting bank may resist or defend against a claim for breach of warranty if the drawer,
the payee, or either the drawee bank or depositary bank was negligent and such negligence
substantially contributed to the loss from alteration. In the instant case, no negligence can be attributed
to petitioners. We lend credence to their claim that at the time of the sales transaction, the Bank’s
branch manager was present and even offered the Bank’s services for the processing and eventual
crediting of the checks. True to the branch manager’s words, the checks were cleared three days later
when deposited by petitioners and the entire amount ofthe checks was credited to their savings
account.