Legal Question in Banking Law in Philippines

What is the validity of bounced check?

My husband lend a check to a friend to be used to borrow money from an individual who lend with interest. They agreed to replaced my husband's check with his own check after a few days, without any wrritten agreement. Unfortunately, he was not able to replaced it with his check, till years passed he didnot even bother to pay. The lendee, ask us to pay for that debt. It's clear to us that my husband friend is not true to his word. until the time the lendee deposited my husband check, which I closed already by the time he deposited it. The checked bounced. So as not to file a case against us, We agreed to pay in terms for 3 years. We ask the lendee to give us back the bounced check and we will issue him good check with smaller amount which he will deposit monthly for the span of 3 years.But he wants to hold the bounced until we are able to pay in 3 years.

Question 1. Can he used the bounced check against, he deposited it month of July?

Question 2. Do we really need to get the bounced check as replacement of the 36 good checks with smaller amount but with a total of the whole debted amount.

Thanks a lot.


Asked on 10/24/07, 11:33 am

1 Answer from Attorneys
Reynaldo Destura Destura & Associates Law Offices

Re: What is the validity of bounced check?

your husband check is what we call as an accommodation check. This is a valid transaction. The issuance of new checks as replacement to the original check is subject to negotiation. Should he not agree, you can still issue the replacement checks but let him acknowledge the fact that it is replacement of the original dishonored checks.

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Answered on 10/31/07, 1:49 am


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