Non-Payment of Debt

For some people, the new year is a symbol of a new beginning and they observe many rituals and practices to ensure a fruitful year ahead. Paying off one’s debt is one. Most of us have incurred debts at some point. It is the quickest way of obtaining much needed money but paying it back is probably the most difficult thing to do. Relationships break down because of unpaid debts since lending money rests upon the confidence of the creditor on the debtor that he will be able to pay the borrowed amount at the appointed time. It is very unlikely for a person to lend money to another if he know that the borrower has no means of paying. The generosity of the creditor in lending money during the debtor’s time of great need is usually reciprocated with frustration and anger if the debt remains unpaid and especially when there is a great possibility that it will never be paid. Surely the debtor who reneges on his obligation to pay deserves a stiff penalty and should even go to prison for his abominable conduct! But can the debtor really go to prison for an unpaid debt?

Sec. 20, Article III, 1987 Constitution

“No person shall be imprisoned for debt on non-payment of a poll tax”. This provision is enshrined in our Constitution as one of the Rights of an individual. This provision prohibits the enactment of a law criminalising non-payment of debt or poll tax. In the 1935 case of People vs. Linsangan (G.R. No. L-43290, December 21, 1935) the conviction of the accused was overturned by the Supreme Court. Linsangan was charged and convicted in the lower court for his failure to pay his cedula or poll tax which was punishable under the Revised Administrative Code (pre-1935 Constitution) by imprisonment of 5 days for each unpaid cedula. The Supreme Court decided in favour of the accused and declared that the new Constitution (1935) expressly prohibits the imprisonment for non-payment of poll tax applies to him. With the inauguration of the new government and the newly approved constitution “section 2718 of the Revised Administrative Code became inoperative, and no judgment of conviction can be based thereon.” This is a very old case and there have been several constitutions containing the prohibition against imprisonment for non payment of debt and poll tax but a 1996 administrative case against a presiding judge revived this supposedly well settled issue.

Ignorance of the Law

Judge “X” was ordered to pay Php 5,000.00 as penalty after he was found guilty by the Supreme Court of ignorance of the law. The administrative complaint arose out of his action in relation to a case raffled in his sala. He issued a warrant of arrest against the defendant in a case where the complaint alleges that defendant owes a certain amount of money from the complainant. The judge claimed that the elements of estafa were alleged in the complaint which justified the issuance of a warrant of arrest. The Supreme Court lambasted the judge although civilly saying that the allegations in the “complaints are clear enough even to an average law student that the acts of Eleazabille Josep complained of do not constitute estafa since they involve a simple case of non-payment of debt.”(A.M. No. MTJ-96-1096. September 10, 1996) It would then appear that the judge issued a warrant of arrest in a civil case of collection of an indebtedness which the 1987 Constitution expressly prohibits.

The prohibition for imprisonment is only for debt and non-payment of poll tax and a person can still be imprisoned if fraud is involved or the provisions of B.P. 22 are violated. If the debtor issues checks in violation of BP 22 for the payment of the indebtedness, he can still be imprisoned under said law. Also, poll tax does not include Internal Revenue and other taxes, meaning a taxpayer who defaults in the payment of his taxes can still be prosecuted and jailed.

May we have a prosperous year this 2017!