G.R. No. L-63419 – 230 Phil. 406 – 146 SCRA 323 – Mercantile Law – Negotiable Instruments Law – Constitutionality of BP 22
Political Law – Constitutional Law – Bill of Rights – Equal Protection Clause
This case is a consolidation of 8 cases regarding violations of the Bouncing Checks Law or Batas Pambansa Blg. 22 (enacted April 3, 1979). In one of the eight cases, Judge David Nitafan of RTC Manila declared the law unconstitutional. Among the arguments against the constitutionality of the law are a.) it is violative of the constitutional provision on non-imprisonment due to debt, and b.) it impairs freedom of contract.
ISSUE: Whether or not BP 22 is constitutional.
HELD: Yes, BP 22 is constitutional.
The Supreme Court first discussed the history of the law. The SC explained how the law on estafa was not sufficient to cover all acts involving the issuance of worthless checks; that in estafa, it only punishes the fraudulent issuance of worthless checks to cover prior or simultaneous obligations but not pre-existing obligations.
BP 22 is aimed at putting a stop to or curbing the practice of issuing checks that are worthless, i.e. checks that end up being rejected or dishonored for payment. The practice is proscribed by the state because of the injury it causes to public interests.
BP 22 is not violative of the constitutional prohibition against imprisonment for debt. The “debt” contemplated by the constitution are those arising from contracts (ex contractu). No one is going to prison for non-payment of contractual debts.
However, non-payment of debts arising from crimes (ex delicto) is punishable. This is precisely why the mala prohibita crime of issuing worthless checks as defined in BP 22 was enacted by Congress. It is a valid exercise of police power.
Due to the insufficiency of the Revised Penal Code, BP 22 was enacted to punish the following acts:
“any person who, having sufficient funds in or credit with the drawee bank when he makes or draws and issues a check, shall fail to keep sufficient funds or to maintain a credit to cover the full amount of the check if presented within a period of ninety (90) days from the date appearing thereon, for which reason it is dishonored by the drawee bank.”
And
“any person who makes or draws and issues any check on account or for value, knowing at the time of issue that he does not have sufficient funds in or credit with the drawee bank for the payment of said check in full upon presentment, which check is subsequently dishonored by the drawee bank for insufficiency of funds or credit or would have been dishonored for the same reason had not the drawer, without any valid reason, ordered the bank to stop payment.”
Congress was able to determine at that time that the issuance of worthless checks was a huge problem. 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 public nuisance to be abated by the imposition of penal sanctions.
Checks are widely used due to the convenience it brings in commercial transactions and confidence is the primary basis why merchants rely on it for their various commercial undertakings. 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. Thus, the Congress, through their exercise of police power, declared that the making and issuance of a worthless check is deemed a public nuisance which can be abated by the imposition of penal sanctions.
The Supreme Court however also explained that (regardless of their previous explanation on ex delicto debts) the non-payment of a debt is not the gravamen of the violations of BP 22. 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.
There is also no valid ground to sustain the contention that BP 22 impairs freedom of contract. The freedom of contract which is constitutionally protected is freedom to enter into “lawful” contracts. Contracts which contravene public policy are not lawful. Besides, checks can not be categorized as mere contracts. It is a commercial instrument which, in this modem day and age, has become a convenient substitute for money; it forms part of the banking system and therefore not entirely free from the regulatory power of the state.
