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, M…

Lozano versus Martinez

The Case

This is a constitutional challenge to Batas Pambansa Bilang 22, the Bouncing Check Law, approved in April 1979. The petitioners were persons prosecuted under that statute who moved to quash the informations against them on the ground that the acts charged did not constitute an offense, the law itself being unconstitutional. The case matters because it is the first time the Supreme Court passed upon the validity of the Bouncing Check Law, and it settles the framework every examiner expects: the gravamen of the offense, the nature of the law as a police power measure, and its relationship to the constitutional prohibition against imprisonment for debt.

Procedural History

The petitions arose from several criminal cases in the regional trial courts. The accused seasonably moved to quash the informations, arguing that the acts charged did not constitute an offense because the statute was unconstitutional. The respondent trial courts denied the motions, except in one case, where the trial court declared the law unconstitutional and dismissed the case. The parties adversely affected came to the Supreme Court. The former Solicitor General raised a threshold objection: the orders denying the motions to quash were interlocutory, so elevation to the Supreme Court was premature. The Court acknowledged this as the general rule but held that in justifiable cases it has intervened to review a denial of a motion to quash. Given the importance of the issue, the Court entertained the petitions and resolved the constitutional challenge promptly, to put to rest the doubts and uncertainty that had delayed cases involving enforcement of the statute.

Facts

Before the Bouncing Check Law, the problem of worthless checks was handled within the law on estafa, as a crime against property focused on the damage to the victim. The old Penal Code, and later Article 315 of the Revised Penal Code, penalized defrauding another through false pretenses, and a 1926 amendment expressly covered the issuance of worthless checks. The deceit in estafa, however, had to be prior to or simultaneous with the fraud, so checks issued in payment of pre-existing obligations fell outside its reach.

In 1967, Republic Act Number 4885 revised the provision, but the amendment did not materially change the situation. A divided Court held in People versus Sabio, Junior that Article 315, as amended, still did not cover checks issued in payment of pre-existing obligations, again because the deceit must be prior to or simultaneous with the fraud. Since statistics showed that the greater bulk of dishonored checks consisted of those issued in payment of pre-existing debts, the amended provision failed to cope with the real problem.

With these antecedents as backdrop, the Interim Batasan enacted the Bouncing Check Law, dealing with the problem directly and without attaching the law to the estafa provisions. The statute makes the act of issuing a worthless check a wrong prohibited by law, what the Court calls malum prohibitum. The law was promptly challenged, unlike the earlier efforts under estafa, and the constitutional objections were consolidated before the Supreme Court.

Issues

• Whether or not the Bouncing Check Law offends the constitutional provision forbidding imprisonment for debt.
• Whether or not the Bouncing Check Law impairs freedom of contract.
• Whether or not the Bouncing Check Law contravenes the equal protection clause.
• Whether or not the Bouncing Check Law unduly delegates legislative and executive powers.
• Whether or not the enactment of the Bouncing Check Law is flawed because the Interim Batasan violated the constitutional provision prohibiting amendments to a bill on Third Reading.

Applicable Provisions

The Bill of Rights forbids imprisonment for debt, and it provides:

No person shall be imprisoned for debt or non-payment of a poll tax.

This is the provision the petitioners invoke, and the Court's central task is to determine whether the Bouncing Check Law runs counter to it.

Article 315 of the Revised Penal Code, as revised by Republic Act Number 4885, defines the estafa provision from which the Bouncing Check Law deliberately departed, and it reads:

By postdating a check, or issuing a check in payment of an obligation when the offender had no funds in the bank, or his funds deposited therein were not sufficient to cover the amount of the check. The failure of the drawer of the check to deposit the amount necessary to cover his check within three days from receipt of notice from the bank and or the payee or holder that said check has been dishonored for lack or insufficiency of funds shall be prima facie evidence of deceit constituting false pretense or fraudulent act.

This provision bears on the case because its failure to reach checks issued for pre-existing obligations is precisely the gap the Bouncing Check Law was enacted to fill.

Ruling

On the first and most serious issue, the Court held that the Bouncing Check Law does not conflict with the constitutional inhibition against imprisonment for debt. The pivotal question is what the statute punishes. The Court ruled that the gravamen of the offense is the act of making and issuing a worthless check, or a check that is dishonored upon 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. Its thrust 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, and the law punishes the act not as an offense against property but as an offense against public order.

The Court explained that while it may be constitutionally impermissible to penalize non-payment of a debt arising from contract, it is within the prerogative of the lawmaking body to proscribe acts deemed pernicious and inimical to public welfare. An act need not be inherently wrong to be outlawed; because of the harm it inflicts on the community, it can be criminally punished as malum prohibitum, a wrong prohibited by law, in the exercise of the police power. The Court described police power as the most essential, insistent and illimitable of powers, enabling the state to prohibit all things hurtful to the comfort, safety and welfare of society. The enactment of the law is a declaration by the legislature that the making and issuance of a worthless check is a public nuisance to be abated by penal sanctions. It is not for the Court to question the wisdom or impolicy of the statute; it is enough that a reasonable nexus exists between means and end.

The Court stressed that a check is not a mere undertaking to pay. It is an order addressed to a bank and partakes of a representation that the drawer has funds on deposit sufficient to ensure payment upon presentation. There is an element of certainty or assurance that the instrument will be paid, and the basis of that perception is confidence. If confidence is shaken, the usefulness of checks as currency substitutes would be greatly diminished. Flooding the system with worthless checks, the Court said, is like pouring garbage into the bloodstream of the nation's economy. The effects transcend the private interests of the parties and touch the interests of the community at large.

On the remaining objections, the Court found no valid ground to sustain the contention that the law impairs freedom of contract, and it declined to detain itself lengthily on the other objections, which it described as rather flimsy. The Court also cautioned that foreign jurisprudence on worthless check acts must be taken with abundant caution, because substantial differences exist between our statute and those of the various states, and because judicial decisions must be read in the context of the facts, the law, and the social, economic and political environment under which they were made.

Doctrine

The Bouncing Check Law is a valid exercise of the police power and is not repugnant to the constitutional inhibition against imprisonment for debt. The gravamen of the offense is the act of making and issuing a worthless check, not the non-payment of an obligation; the law neither intends nor designs to coerce a debtor to pay his debt. The offense is against public order, not against property. The state may punish an act as malum prohibitum, a wrong prohibited by law, even if society does not consider it inherently wrong, because of the harm it inflicts on the community. The constitutional guarantee against imprisonment for debt, as the Court explained through Justice Malcolm in Ganaway versus Quillen, was intended to prevent commitment of debtors to prison for liabilities arising from actions ex contractu, meaning obligations arising from contract, and was never meant to include fines and penalties imposed in criminal proceedings as punishment for crime.

Disposition

The petitions challenging the statute were resolved in favor of the government: the Court upheld the constitutionality of the Bouncing Check Law and sustained the orders of the trial courts denying the motions to quash.

Remember This

Memorize the line: the gravamen of the offense is the act of making and issuing a worthless check, not the non-payment of a debt. Examiners use this case to test the police power and malum prohibitum framework, and to distinguish the Bouncing Check Law from estafa under Article 315, especially for checks issued in payment of pre-existing obligations.