Letter to Attorney

Dear Attorney,

I hope this message finds you well. I am seeking your expert legal guidance concerning several matters that involve potential demand letters. These include issues surrounding the violation of BP 22, foreclosure of mortgage, and a demand to vacate (ejectment). I would greatly appreciate your meticulous advice on these concerns to ensure proper legal handling of each situation.

Thank you in advance for your valuable assistance.

Sincerely,
A Concerned Business Entity

Legal Article on Demand Letters: Violation of BP 22, Foreclosure of Mortgage, and Ejectment

Introduction

In the Philippine legal system, demand letters serve as vital precursors to litigation or enforcement actions. They are used to formally inform parties of a breach or violation and offer them the opportunity to rectify their situation before a legal dispute escalates to court proceedings. This article aims to provide an in-depth understanding of demand letters in the context of three specific concerns: (1) violation of Batas Pambansa Blg. 22 (BP 22), also known as the Anti-Bouncing Checks Law, (2) foreclosure of mortgage, and (3) demand to vacate or ejectment. Each of these legal issues carries significant consequences, and it is important to approach them with a full understanding of the applicable laws and procedures.

Violation of BP 22: Anti-Bouncing Checks Law

Overview of BP 22

Batas Pambansa Blg. 22, enacted in 1979, penalizes the issuance of checks without sufficient funds or when the account has been closed by the drawer at the time the check is presented for payment. The law was introduced to curb the proliferation of bounced checks, which undermine the reliability of checks as negotiable instruments in commercial transactions.

Elements of the Offense

A violation of BP 22 occurs when the following elements are present:

A check is issued—The check must be issued for value (i.e., in payment for a debt or obligation).
The check is dishonored—The check is presented for payment, but the bank dishonors it due to insufficient funds or the account having been closed.
Notice of dishonor is received—The issuer must receive notice of dishonor, typically in the form of a demand letter from the payee, informing them that the check was not honored by the bank.

The payee must send a demand letter to the drawer within five days from receiving notice of dishonor from the bank. The drawer is then given a period of five banking days to settle the obligation. If the drawer fails to settle within this period, the offense of BP 22 is deemed to have been committed, and criminal liability attaches.

The Role of Demand Letters in BP 22 Cases

The demand letter serves two key functions in cases of BP 22 violations:

Formal Notification—It informs the drawer of the dishonor and provides an opportunity to rectify the situation by making good on the payment.
Legal Prerequisite for Filing a Case—A demand letter is a procedural requirement before criminal prosecution for BP 22 can be initiated. Failure to send such a letter can result in the dismissal of the case for non-compliance with the law.

Penalties for Violating BP 22

The penalties for violating BP 22 include imprisonment for a term of up to one year, or a fine equivalent to double the amount of the check, but not exceeding PHP 200,000. The court has the discretion to impose either or both penalties, depending on the circumstances of the case.

It is important to note that BP 22 cases are criminal in nature, but there are also civil aspects, as the drawer remains liable to pay the amount of the check, along with any additional damages the payee may have suffered as a result of the non-payment.

Defenses Against BP 22 Violations

Several defenses are available to individuals accused of violating BP 22:

Lack of Notice—If the drawer did not receive a demand letter or notice of dishonor, the case can be dismissed.
Payment Prior to Filing—If the drawer settles the obligation before the case is filed, the criminal aspect of BP 22 may no longer apply.
No Intent to Defraud—Although BP 22 is a special penal law, and intent to defraud is not required, demonstrating that the issuance of the check was made in good faith (e.g., due to an honest mistake or unforeseen financial difficulty) can mitigate penalties.

Foreclosure of Mortgage

Overview of Mortgage Law in the Philippines

A mortgage is a security arrangement where a debtor (mortgagor) pledges property to a creditor (mortgagee) as collateral for a loan. If the debtor defaults on the loan, the creditor has the legal right to foreclose the mortgage and sell the property to recover the amount owed.

Foreclosure proceedings in the Philippines can be either judicial or extrajudicial. The type of foreclosure determines the specific legal steps involved, but in both cases, the creditor typically issues a demand letter as a precursor to the foreclosure action.

Judicial Foreclosure

In judicial foreclosure, the mortgagee files a petition in court to foreclose the property. This process involves litigation, and the court issues a judgment ordering the sale of the mortgaged property at a public auction. The proceeds of the sale are then applied to the outstanding debt.

Steps in judicial foreclosure include:

Filing of a petition in court.
Court proceedings and trial.
Issuance of a judgment by the court.
Conduct of a public auction to sell the property.

A demand letter is usually sent to the mortgagor prior to filing a judicial foreclosure case, informing them of the default and demanding payment of the outstanding loan amount. The mortgagor may be given a grace period to settle the debt before the foreclosure petition is filed.

Extrajudicial Foreclosure

Extrajudicial foreclosure is a faster and less expensive process compared to judicial foreclosure. It is only applicable if there is a stipulation in the mortgage contract allowing the creditor to foreclose the property without court intervention. In this process, the creditor sends a demand letter notifying the debtor of the default and giving them a period to cure the breach. If the debtor fails to pay, the property is sold at a public auction without court involvement.

The demand letter plays a crucial role in extrajudicial foreclosure because it serves as the debtor's final opportunity to prevent the sale of the property. If the debtor fails to settle the obligation within the grace period specified in the letter, the foreclosure proceeds.

Right of Redemption

In cases of judicial foreclosure, the mortgagor has the right to redeem the property within one year from the date of the sale by paying the total amount of the debt, plus interest and costs. In extrajudicial foreclosure, the right of redemption only applies to mortgaged properties that are registered under the Torrens system, and the redemption period is also one year from the date of sale.

Demand to Vacate (Ejectment)

Overview of Ejectment

Ejectment refers to legal proceedings initiated by a property owner or lessor to recover possession of a property from a tenant or occupant who refuses to vacate. Ejectment cases are governed by the Rules of Court and may involve unlawful detainer or forcible entry.

Unlawful Detainer—This occurs when a tenant or occupant continues to possess the property after the expiration of their lease or the termination of their right of possession. The lessor or property owner must first send a demand letter requiring the occupant to vacate the premises before filing an ejectment case.
Forcible Entry—This occurs when an occupant takes possession of a property by force, intimidation, stealth, or threat. In such cases, the property owner can file an ejectment case without needing to send a demand letter.

The Role of Demand Letters in Ejectment

For unlawful detainer cases, the lessor or owner must send a demand letter to the occupant, specifying the reason for the demand (e.g., expiration of the lease or non-payment of rent) and providing a reasonable period for the occupant to vacate the property. Failure to comply with the demand can lead to the filing of an ejectment case in court.

The demand letter is important because it serves as a prerequisite to filing the ejectment case. Without a demand letter, the court may dismiss the case for lack of cause of action.

Remedies and Procedures in Ejectment Cases

Ejectment cases are summary in nature, meaning they are designed to be resolved quickly, with the primary issue being possession. The courts do not delve into questions of ownership in ejectment proceedings. Once an ejectment case is filed, the court typically issues a judgment within a short period, and the losing party may appeal.

If the court rules in favor of the property owner or lessor, the sheriff will enforce the judgment by evicting the occupant from the premises.

Defenses in Ejectment Cases

Occupants facing ejectment may raise several defenses, including:

Lack of Valid Lease Agreement—The occupant may argue that no valid lease agreement existed, and therefore, they are not bound to vacate the property.
Waiver or Estoppel—If the lessor accepted rental payments after the expiration of the lease, the tenant may argue that the lessor waived the right to eject them.
Ownership Dispute—Although ejectment cases primarily deal with possession, the occupant may raise an ownership dispute as a defense, although such claims are typically resolved in a separate case.

Conclusion

Demand letters are critical legal tools in cases involving the violation of BP 22, foreclosure of mortgages, and

ejectment. They serve as formal notifications and prerequisites for legal action, giving the concerned party an opportunity to rectify their breach before litigation is pursued. In BP 22 cases, a demand letter ensures compliance with procedural requirements, while in foreclosure and ejectment cases, it provides the debtor or occupant with a final chance to avoid further legal consequences.

Understanding the specific legal requirements and implications of each type of demand letter is essential for navigating these issues effectively. Legal professionals and individuals alike must approach these matters with meticulous attention to the details of the law to protect their rights and interests.