No One can be Imprisoned for Non-Payment of Debt

Perhaps you’ve heard someone making threats to file criminal cases against debtors who fail to pay. On the other hand, perhaps you’ve heard about the rule that no one can be imprisoned simply because of a debt in the Philippines. The prohibition against imprisonment for a debt is a basic right enshrined in no less than the Philippine Constitution. Article III of the Constitution reads:

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

No One can be Imprisoned for Debt in the Philippines

REASON FOR NON-IMPRISONMENT

The Supreme Court explained the rationale for this prohibition in the case of Lozano vs. Martinez:

. . . 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.

This humanitarian provision was transported to our shores by the Americans at the turn of the century and embodied in our organic laws. 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.

In other words, no one can be compelled to pay a debt under pain of criminal sanctions (estafa is a different matter). No one can be imprisoned for non-payment of debt. The remedy of the creditor is civil in nature.

Let’s examine some laws that were questioned, albeit unsuccessfully, on the ground that these laws violate the constitutional prohibition against non-imprisonment for debt.

BOUNCING CHECKS

Bouncing Checks Law (BP 22) does not punish the non-payment of an obligation. The law is not 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. Checks have become widely accepted as a medium of payment in trade and commerce, and if the confidence in checks is shaken,  the usefulness of checks as currency substitutes would be greatly diminished. When the question was resolved in 1986, it had been reported that the approximate value of bouncing checks per day was close to 200 Million Pesos, thereafter averaging between P50 to P80 Million a day. (Lozano vs. Martinez)

TRUST RECEIPTS

The same argument was raised against the Trust Receipts Law (Presidential Decree No. 115). The passage of P.D. 115 is a declaration by the legislative authority that, as a matter of public policy, the failure of a person to turn over the proceeds of the sale of goods covered by a trust receipt (or to return said goods if not sold) is a public nuisance to be abated by the imposition of penal sanctions.

It punishes the dishonesty and abuse of confidence in the handling of money or goods to the prejudice of another. The law does not seek to enforce payment of a loan. (Tiomico vs. CA)

CREDIT CARDS

Under the Access Devices Regulation Act of 1998 (Republic Act No. 8484), anyone who obtains “money or anything of value through the use of an access device, with intent to defraud or with intent to gain and fleeing thereafter” is criminally liable.

R.A. 8484 provides for a presumption: a cardholder who abandons or surreptitiously leaves the place of employment, business or residence stated in his application or credit card, without informing the credit card company of the place where he could actually be found, if at the time of such abandonment or surreptitious leaving, the outstanding and unpaid balance is past due for at least 90 days and is more than P10,000, shall be prima facie presumed to have used his credit card with intent to defraud.” We are still waiting for the test case on this.

Atty.Fred

349 thoughts on “No One can be Imprisoned for Non-Payment of Debt

  1. Avatarbooz

    ptulong po awol teacher po ako kya lng may naiwan akong loan at matagal na akong nd nkabayad pero wiling po ako mgbayad kya lng gusto nung bangko kalahati agad nung loan ang byaran ko..eh hindi ko po kaya ano po mganda gawin?

    Reply
  2. AvatarLeandro

    Good day! I would like some inquiries about debts. My friend owes me a money and we had signed agreement states that she will pay me in day to day basis for only 2 months period. But unfortunately she didn’t comply to pay me in full until now it almost 3 months over due already… What are the things should i need to do in order to obliged her to pay me. Thank you so much… Please reply i highy appreciate it your advice.

    Reply
  3. AvatarJoe

    Can you be imprisoned for being unable to pay your remaining balance in school? A lot of students right now has the same problem because of this pandemic and most of them will be halting their education due to financial difficulties because of the current situation of this country. Can theSe private schoolS file a legal action against this poor students? Thank you

    Reply
    1. pnlpnl

      Hi Joe. No, no one can be imprisoned solely because of a debt. However, as discussed in the article, there is a separate liability for other matters, like issuing a check that bounced. Good luck.

  4. AvatarChona Tamayo

    I tried loaning online with several online lending companies.. I paid my loans except of this Online Pilipinas because. Of their rudeness I borrowed 5 thou and I was delayed for a day and Asked them to payfor extension fee because I am not yet paid but the collector threatened me that. I should pay all that day or else she will call all my contacts.. that my contacts is my. Collateral that they will forward it on a law Firm.. I was very annoyed because for only one day they talk like shit.. while other lending talk nicely. And gave options and 7 days grace period. So I was. Challenged and. Told them to sue me. And I will see them in court.. they called. Many times but I ignored them and. Later. Send me options. That. I was given a discount promo but I told them that I would want to meet that lady collector so Im waiting for that subpoena but until now I didnt recieve any notice. I think they are illegal lending company.

    Reply

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