§708-857  Negotiating a worthless negotiable
instrument.  (1)  A person commits the offense of negotiating a worthless
negotiable instrument if that person intentionally issues or negotiates a
negotiable instrument knowing that it will not be honored by the maker or
drawee.



(2)  For the purpose of this section, as well
as in any prosecution for theft committed by means of a worthless negotiable
instrument, either of the following shall be prima facie evidence that the
drawer knew that the negotiable instrument would not be honored upon
presentation:



(a) The drawer had no account with the drawee at the
time the negotiable instrument was negotiated; or



(b) Payment was refused by the drawee for lack of
funds upon presentation within thirty days after date or issue, whichever is
later, and the drawer failed to make good within ten days after actual receipt
of a notice of dishonor, as defined in section 490:3-503.



(3)  The definitions of the following terms
shall apply to this section:



(a) "Issue" as defined in section
490:3-105;



(b) "Negotiable instrument" as defined in
section 490:3-104;



(c) "Negotiation" as defined in section
490:3-201.



(4)  Negotiating a worthless negotiable
instrument is a misdemeanor. [L 1972, c 9, pt of §1; am L 1993, c 33, §2]



 



COMMENTARY ON §708-857



 



  This section is concerned with the passage of worthless
negotiable instruments where the actor has knowledge that the instrument will
not be honored.  Originally, bad check legislation was necessitated by the
common-law limitations on promissory fraud: misrepresentation of a future fact
was not sufficient to establish theft by deception.  Such artificial
distinctions are largely obviated by the definition of "deception"
used in the Code's theft provisions.[1]  As noted in the comments to the
Proposed Michigan Code,



the elimination
of the promissory fraud doctrine thus eliminates the need for a bad check
statute in its traditional form.  This might suggest that there is no point
served in continuing a bad check statute in the Draft.  In answer, the statute
can serve a useful purpose when the merchant or bank that is in fact defrauded
does not wish to prosecute but the bank on which the bad check is drawn
does.[2]



This section, moreover, protects the prevailing system of
negotiable paper in addition to those individuals involved in a given case. 
Since emphasis in "bad check" cases ought to be placed upon the
theft, rather than on the bad check itself, the sanction provided for this
offense is relatively mild, i.e., a misdemeanor, and the grade of the offense
does not, as in the case of theft offenses, vary according to the amount
involved.



  The incorporation of the Uniform Commercial Code's
definitions of "issue," "negotiable instrument," and
"negotiation" in subsection (3), is intended to insure that in this
area, where protection of commercial transactions are reinforced with criminal
sanctions, the civil and penal law are closely correlated.  The use of the
U.C.C.'s definition of "negotiation" insures that the indorser with
knowledge or expectation of ultimate nonpayment, as well as the drawer, with
such knowledge or expectation, will be covered.



  Under the evidentiary rules established in subsection (2),
the prosecution fulfills its initial burden of proving intent by demonstrating,
beyond a reasonable doubt, either that the issuer had no account with the
drawee, or that such an instrument was not made good within ten days of receipt
of notice of dishonor.  Again, the definitions of the Uniform Commercial Code
are used for both convenience and uniformity.  Note, however, the modifications
toward leniency necessitated in adapting a civil statute to criminal use: 
actual, rather than constructive, receipt of notice of dishonor is required
before the time in which the actor must make good begins to run.  The time
period required by subsection (2)(b) does not prevent prosecution before the
time has elapsed, but only denies to the prosecution the benefit of that
particular evidentiary provision before the stated time has elapsed.



  Previous Hawaii law defined this offense similarly, except
that Hawaii law required an intent to defraud.[3]  The Code provides that
knowledge of insufficient funds is adequate culpability for the imposition of
this penalty.  Moreover, distinguishing such knowledge from an intent to
defraud introduces conceptual niceties of questionable value.  Hawaii law also
recognized both the prima facie evidence of the requisite culpability based
upon insufficient funds and failure to correct the insufficiency within five days.[4] 
The Code attempts to better correlate this offense, both in language and
substance, with the civil law relating to negotiable instruments.



 



SUPPLEMENTAL COMMENTARY ON §708-857



 



  Act 33, Session Laws 1993, amended this section by updating
cross references to article 3 of the Uniform Commercial Code, which was
repealed and replaced by Act 118, Session Laws 1991.  House Standing Committee
Report No. 513, Senate Standing Committee Report No. 1068.



 



Case Notes



 



  Section construed as permitting but not compelling the
inference of guilt under subsection (2)(b).  57 H. 526, 560 P.2d 110.



 



__________



§708-857 Commentary:



 



1.  §708-800.



 



2.  Prop. Mich. Rev. Cr. Code, comments at 276.



 



3.  H.R.S. §744-1.



 



4.  Id. §744-3.