BP 22 AND POLICE POWER

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The legislature may prescribe criminal punishment for acts inimical to public welfare

It may be constitutionally impermissible for  the legislature to penalize a person for non-payment of a debt excontractu. But certainly it is within the prerogative of the lawmaking body to proscribe certain acts deemed pernicious and inimical to public welfare. Acts mala in se are not the only facts which the law can punish. An act may not be considered by society as inherently wrong, hence not malum in se, but because of the harm that it inflicts on the community, it can be outlawed and criminally punished as malum prohibitum. The state can do this in the exercise of its police power.

Valid exercise thereof; Not repugnant to constitutional inhibition against imprisonment for debt.

The police power of the state has been described as "the most essential, insistent and illimitable of powers" which enables it to prohibit all things hurtful to the comfort, safety and welfare of society. It is power not emanating from or conferred by the constitution, but inherent in the state, plenary, "suitably vague and far from precisely defined, rooted in the conception that man in organizing the state and imposing upon the government limitations to safeguard constitutional rights did not intend thereby to enable individual citizens or group of citizens to obstruct unreason able the enactment of such salutary measures to ensure communal peace, safety, good order and welfare." The enactment of B.P. 22 is a declaration by the legislature that, as a matter of public policy, the making and issuance of a worthless check is deemed a public nuisance to be abated by the imposition of penal sanctions. The effect of the issuance of a worthless checks transcends the private interests of the parties directly involved in the transaction and touches the interests of the community at large. The mischief it creates is not only a wrong to the payee or holder, but also an injury to the public. In sum, we find the enactment of B.P. 22 a valid exercise of the police power and is not repugnant to the constitutional inhibition against imprisonment for debt.

 

 

Among the constitutional objections raised against BP 22, the most serious is the alleged conflict between the statute and the constitutional provision forbidding imprisonment for debt. It is contended that the statute runs counter to the inhibition in the Bill of Rights which states, "No person shall be imprisoned for debt or non-payment of a poll tax." 16 Petitioners insist that, since the offense under BP 22 is consummated only upon the dishonor or non-payment of the check when it is presented to the drawee bank, the statute is really a "bad debt law" rather than a "bad check law." What it punishes is the non-payment of the check, not the act of issuing it. The statute, it is claimed, is nothing more than a veiled device to coerce payment of a debt under the threat of penal sanction.

First of all, it is essential to grasp the essence and scope of the constitutional inhibition invoked by petitioners. Viewed in its historical context, the constitutional prohibition against imprisonment for debt is a safeguard that evolved gradually during the early part of the nineteenth century in the various states of the American Union as a result of the people's revulsion at the cruel and inhumane practice, sanctioned by common law, which permitted creditors to cause the incarceration of debtors who could not pay their debts. At common law, money judgments arising from actions for the recovery of a debt or for damages from breach of a contract could be enforced against the person or body of the debtor by writ of capias ad satisfaciendum. By means of this writ, a debtor could be seized and imprisoned at the instance of the creditor until he makes the satisfaction awarded. As a consequence of the popular ground swell against such a barbarous practice, provisions forbidding imprisonment for debt came to be generally enshrined in the constitutions of various states of the Union. 17. For a survey of the constitutional provisions of various American States, see Tan Cong v. N.L. Stewart, 42 Phil. 809.

This humanitarian provision was transported to our shores by the Americans at the turn of the century and embodied in our organic laws. 18.Philippine Bill of 1902; Jones Law (1916).Later, our fundamental law outlawed not only imprisonment for debt, but also the infamous practice, native to our shore, of throwing people in jail for non-payment of the cedula or poll tax. 19.1935 Constitution, Art. III, Sec. 1 (12); 1973 Constitution, Art. IV, Sec. 13.

The reach and scope of this constitutional safeguard have been the subject of judicial definition, both by our Supreme Court  20 Tan Cong vs. N.L. Stewart (1907) 42 Phil. 809; Ganaway v. Quillen (1922), 42 Phil. 815.and by American state courts. 2116-A Am. Jur. 2d, 566-574. Mr. Justice Malcolm, speaking for the Supreme Court in Ganaway vs. Quillen,  22 42 Phil. 805, 807-808.stated: "The 'debt' intended to be covered by the constitutional guaranty has a well-defined meaning. Organic provisions relieving from imprisonment for debt, were intended to prevent commitment of debtors to prison for liabilities arising from actions ex contractu. The inhibition was never meant to include damages arising in actions ex delicto, for the reason that damages recoverable therein do not arise from any contract entered into between the parties but are imposed upon the defendant for the wrong he has done and are considered as punishment, nor to fines and penalties imposed by the courts in criminal proceedings as punishments for crime."

The law involved in Ganaway was not a criminal statute but the Code of Procedure in Civil Actions (1909) which authorized the arrest of the defendant in a civil case on grounds akin to those which justify the issuance of a writ of attachment under our present Rules of Court, such as imminent departure of the defendant from the Philippines with intent to defraud his creditors, or concealment, removal or disposition of properties in fraud of creditors, etc. The Court, in that case, declared the detention of the defendant unlawful, being violative of the constitutional inhibition against imprisonment for debt, and ordered his release. The Court, however, refrained from declaring the statutory provision in question unconstitutional.

Closer to the case at bar is People v. Vera Reyes, 23 67 Phil. 187, 190. wherein a statutory provision which made illegal and punishable the refusal of an employer to pay, when he can do so, the salaries of his employees or laborers on the fifteenth or last day of every month or on Saturday every week, was challenged for being violative of the constitutional prohibition against imprisonment for debt. The constitutionality of the law in question was upheld by the Court, it being within the authority of the legislature to enact such a law in the exercise of the police power. It was held that "one of the purposes of the law is to suppress possible abuses on the part of the employers who hire laborers or employees without paying them the salaries agreed upon for their services, thus causing them financial difficulties." The law was viewed not as a measure to coerce payment of an obligation, although obviously such could be its effect, but to banish a practice considered harmful to public welfare.

IV

Has BP 22 transgressed the constitutional inhibition against imprisonment for debt? To answer the question, it is necessary to examine what the statute prohibits and punishes as an offense. Is it the failure of the maker of the check to pay a debt? Or is it the making and issuance of a worthless check in payment of a debt? What is the gravamen of the offense? This question lies at the heart of the issue before us.

The gravamen of the offense punished by BP 22 is the act of making and issuing a worthless check or a check that is dishonored upon its presentation for payment. It is not the non-payment of an obligation which the law punishes. The law is not intended or designed to coerce a debtor to pay his debt. The thrust of the law is to prohibit, under pain of penal sanctions, the making of worthless checks and putting them in circulation. Because of its deleterious effects on the public interest, the practice is proscribed by the law. The law punishes the act not as an offense against property, but an offense against public order.

Admittedly, the distinction may seem at first blush to appear elusive and difficult to conceptualize. But precisely in the failure to perceive the vital distinction lies the error of those who challenge the validity of BP 22.

It may be constitutionally impermissible for the legislature to penalize a person for non-payment of a debt ex contractu. But certainly it is within the prerogative of the lawmaking body to proscribe certain acts deemed pernicious and inimical to public welfare. Acts mala in se are not the only acts which the law can punish. An act may not be considered by society as inherently wrong, hence, not malum in se, but because of the harm that it inflicts on the community, it can be outlawed and criminally punished as malum prohibitum. The state can do this in the exercise of its police power.

The police power of the state has been described as "the most essential, insistent and illimitable of powers" which enables it to prohibit all things hurtful to the comfort, safety and welfare of society. 24 Smith, Bell & Co. v. National (1919), 40 Phil. 136; Rubi v. Prov. Bd. of Mindoro (1919). It is a power not emanating from or conferred by the constitution, but inherent in the state, plenary, suitably vague and far from precisely defined, rooted in the conception that man in organizing the state and imposing upon the government limitations to safeguard constitutional rights did not intend thereby to enable individual citizens or group of citizens to obstruct unreasonably the enactment of such salutary measures to ensure communal peace, safety, good order and welfare." 25   Fernando, J. in Edu v. Ericta, 35 SCRA 481.

The enactment of BP 22 is a declaration by the legislature that, as a matter of public policy, the making and issuance of a worthless check is deemed a public nuisance to be abated by the imposition of penal sanctions.

It is not for us to question the wisdom or impolicy of the statute. It is sufficient that a reasonable nexus exists between means and end. Considering the factual and legal antecedents that led to the adoption of the statute, it is not difficult to understand the public concern which prompted its enactment. It had been reported that the approximate value of bouncing checks per day was close to 200 million pesos, and thereafter when overdrafts were banned by the Central Bank, it averaged between 50 million to 80 million pesos a day. 26 Dissenting Opinion, Antonio, J. in People v. Sabio, Jr., supra, p. 600.

By definition, a check is a bill of exchange drawn on a bank and payable on demand. 27. Section 185, Negotiable Instruments Law. It is a written order on a bank, purporting to be drawn against a deposit of funds for the payment of all events, of a sum of money to a certain person therein named or to his order or to cash, and payable on demand. 28 Black's Law Dictionary (5th Ed.) p. 215. Unlike a promissory note, a check is not a mere undertaking to pay an amount of money. It is an order addressed to a bank and partakes of a representation that the drawer has funds on deposit against which the check is drawn, sufficient to ensure payment upon its presentation to the bank. There is therefore an element of certainty or assurance that the instrument will be paid upon presentation. For this reason, checks have become widely accepted as a medium of payment in trade and commerce. Although not legal tender, checks have come to be perceived as convenient substitutes for currency in commercial and financial transactions. The basis or foundation of such perception is confidence. If such confidence is shaken, the usefulness of checks as currency substitutes would be greatly diminished or may become nil. Any practice therefore tending to destroy that confidence should be deterred, for the proliferation of worthless checks can only create havoc in trade circles and the banking community.

Recent statistics of the Central Bank show that one-third of the entire money supply of the country, roughly totalling P32.3 billion, consists of peso demand deposits; the remaining two-thirds consists of currency in circulation. 29.        CB Review, August, 1986, p. 6. For example, for the month of August, 1986, the total money supply was P32.326 billion, of which P21.640 billion represented currency in circulation and P10,677 billion, peso demand deposits. These demand deposits in the banks constitute the funds against which, among others, commercial papers like checks, are drawn. The magnitude of the amount involved amply justifies the legitimate concern of the state in preserving the integrity of the banking system. Flooding the system with worthless checks is like pouring garbage into the bloodstream of the nation's economy.

The effects of the issuance of a worthless check transcends the private interests of the parties directly involved in the transaction and touches the interests of the community at large. The mischief it creates is not only a wrong to the payee or holder, but also an injury to the public. The harmful practice of putting valueless commercial papers in circulation, multiplied a thousandfold, can very well pollute the channels of trade and commerce, injure the banking system and eventually hurt the welfare of society and the public interest. As aptly stated — 30 Stacy, C.J., concurring in State v. Yarboro (1927) 194 N.C. 498 140 S.E. 216, 220.

"The 'check flasher' does a great deal more than contract a debt; he shakes the pillars of business; and to my mind, it is a mistaken charity of judgment to place him in the same category with the honest man who is unable to pay his debts, and for whom the constitutional inhibition against `imprisonment for debt, except in cases of fraud' was intended as a shield and not a sword."

In sum, we find the enactment of BP 22 a valid exercise of the police power and is not repugnant to the constitutional inhibition against imprisonment for debt.

This Court is not unaware of the conflicting jurisprudence obtaining in the various states of the United States on the constitutionality of the "worthless check" acts. 31.        For a survey of decisions on the subject, see Annotations, 23 A.L.R. 459 and 76 A.L.R. 1229, Constitutionality upheld: Frazier v. State (1931) 135 So. 280; Ex parte Rosencratz (1931) 299 Pac. 15; Carter v. Lowry (1929) 167 Ga. 151 S.E. 23; Caughlan v. State (1927) 22 Ala. 220, 114 So. 280; State v. Yarboro (1927) 194 N.C. 498, 140, S.E. 216; State v. Avery (1922) 207 Pac. 838, 23 A.L.R. 453; Hollis v. State (1921) 152 Ga. 192, 108 S.E. 783; McQuagge v. State (1920) 80 Fla. 768, 87 So. 60, State v. Pilling (1909) 53 Wash. 464; 132 Am. St. Contra: State v. Nelson (1931) 237 N.W. 766, 76 A.L.R. 1226; Burnham v. Com. (1929) 228 Ky. 410, 15 S.W. (2d) 256; Ward v. Com. (1929) 228 Ky 468, 15 S.W. (2d) 276; Neidlinger v. State (1916) 17 Ga. App. 811, 88 S.E. 687; Carr v. State (1895) 106 Ala. 35, 34 L.R.A. 634. It is needless to warn that foreign jurisprudence must be taken with abundant caution. A caveat to be observed is that substantial differences exist between our statute and the worthless check acts of those states where the jurisprudence have evolved. One thing to remember is that BP 22 was not lifted bodily from any existing statute. Furthermore, we have to consider that judicial decisions must be read in the context of the facts and the law involved and, in a broader sense, of the social, economic and political environment — in short, the milieu — under which they were made. We recognize the wisdom of the old saying that what is sauce for the goose may not be sauce for the gander.

As stated elsewhere, police power is a dynamic force that enables the state to meet the exigencies of changing times. There are occasions when the police power of the state may even override a constitutional guaranty. For example, there have been cases wherein we held that the constitutional provision on non-impairment of contracts must yield to the police power of the state. 32   Phil. American Life Insurance Co. v. Auditor General, 22 SCRA 135. Whether the police power may override the constitutional inhibition against imprisonment for debt is an issue we do not have to address. This bridge has not been reached, so there is no occasion to cross it.

We hold that BP 22 does not conflict with the constitutional inhibition against imprisonment for debt.

EN BANC, Justice Yap, FLORENTINA A. LOZANO, petitioner, vs. THE HONORABLE ANTONIO M. MARTINEZ, in his capacity as Presiding Judge, Regional Trial Court, National Capital Judicial Region, Branch XX, Manila, and the HONORABLE JOSE B. FLAMINIANO, in his capacity as City Fiscal of Manila, respondents.[G.R. Nos. L-66839-42.  December 18, 1986.]

 

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