Lozano vs.

Martinez 146 SCRA 659

FACTS:
Petitioners assail the validity of BP 22, also known as the Bouncing Check Law.
BP 22 punishes a person “who makes or draws and issues any check on account
for value, knowing at the time of issue that he does not have sufficient funds in
or credit with the drawee bank..”.
It is aimed at putting a stop to the practice of issuing checks that are worthless
which causes injury to the public interest.
Additonally, BP 22 does not constitute an undue delegation of legislative powers.
Contrary to the contention, the power to define the offense and to prescribe the
penalty are not delegated to the payee.
On the last contention, the Interim Batasan investigated the matter and reported
that the clause in question was an authorized amendment of the bill. With all the
foregoing reasons, the constitutionality of BP 22 is upheld.

Contentions on the law are that:

1. It offends constitutional provision forbidding imprisonment for debt;

2. It impairs freedom of contract;
3. It contravenes the equal protection clause;
4. It unduly delegates legislative and executive powers
5. Its enactment is flawed because the Interim Batasan violated the
prohibition on amendments in the Third Reading

ISSUE: Whether or not BP 22 is a valid law exercise of Police Power.

HELD:

The offense punished by BP 22 is the act of making and issuing a worthless check,
not the non-payment of an obligation which the law punishes. The effects of
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 since putting valueless commercial papers in circulation can pollute the
channels of trade and commerce, injure the banking system and eventually hurt
the welfare of society and the public interest. Hence, the enactment of BP 22 is a
valid exercise of police power and is not in conflict with the constitutional
inhibition against imprisonment for debt.

There is no valid ground to sustain the contention the BP 22 impairs freedom of

contract since contracts which contravene public policy are not lawful. We
must bear in mind that 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.

The statute does not deny the equal protection clause since it only penalizes the
drawer of the check and not the payee.