Request By:
Mr. Sam W. Arnold, III
Assistant Harrison County Attorney
Box 126
Cynthiana, Kentucky 41031
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Robert W. Hensley, Assistant Attorney General
You ask whether a merchant must give a drawer of a check a ten day notice before a warrant is issued when the check has been returned to the merchant with a bank notation that the drawer has no account. The answer to this question revolves around the statutory construction of KRS 514.040, Theft by deception.
In order to be guilty of violating this statute KRS 514.040(1)(e) requires that a person intentionally issue or pass a check with the knowledge that it will not be honored by the drawee. Under subsection (4) of KRS 514.040, knowledge on the part of the person issuing or passing the check is presumed if,
(a) the issuer had no account with the drawee at the time the check or order was issued; or
(b) payment was refused by the drawee for lack of funds, upon presentation within thirty (30) days after issue, and the issuer failed to make good within ten (10) days after receiving notice of that refusal.
By looking at KRS 514.040(4) in its entirety it is clear that knowledge may be presumed on the part of the issuer of the check if either subsection (a) or (b) are satisfied. Subsection (a) makes no mention of a requirement of a ten day notice before the presumption becomes operative, only that the issuer had no account at the time of the issuance of the check.
Contrast this to KRS 514.040(4)(b) where there is the requirement that payment of the check was refused by the drawee for lack of funds and the issuer fails to pay the amount of the check within ten days after receiving notice of that refusal. The words "that refusal" refer back to the refusal of the drawee to pay because of lack of funds. Thus it appears by the construction of the statute that the ten day notice period applies only when the check was dishonored for lack of funds and not when the issuer drew a check on a non-existent account.
Everyday experience buttresses this interpretation of KRS 514.040(4). For example, there may be instances where a person may issue a check believing that he or she has sufficient funds in his or her account to cover the check only to discover later that they were mistaken in their belief. The statute recognizes this aspect of human nature by allowing ten days after receiving notice of the insufficient funds to make good on the check before the law will presume that the person "knew" the check would not be paid.
On the other hand, it is very unlikely that a person would believe a check would be honored when in fact the person did not even have an account with the drawee.
Therefore, it is the opinion of this office that a ten day notice is not mandated by KRS 514.040 before a warrant can be issued for a person who issued a check and had no account with the drawee.
We apologize for this inordinate delay in answering your letter but at the time it arrived in this office we were preparing some legislation for the 1978 legislative session and with our other litigation we were unable to answer our other letters as quickly as we would like.