G.R. No. 149122 - Heirs of Venturanza vs. Republic

The defendant, Franco Veba Reyes, was charged in the Court of First Instance of Manila by the assistant city fiscal.
The charge stemmed from a violation of Act No. 2549, as amended by Acts Nos. 3085 and 3958.

From September 9 to October 28, 1936, and for some time thereafter, the defendant, in his capacity as president and general manager of Consolidated Mines, engaged in an illicit practice concerning an employee.
The employee in question was Severa Velasco de Vera, hired as a stenographer at an agreed salary of P35 a month.
It was alleged that despite her repeated demands, the defendant willfully and illegally refused to pay her due salary for the aforementioned period.

Section 1 of Act No. 2549, as amended by section 1 of Act No. 3958, was central to the dispute.

The said provision made it unlawful for employers to delay salary payments beyond the specified periods (the fifteenth or last day of every month, or on Saturday of every week extended by two days).
It further provided that any failure to timely pay, when capable of doing so, would constitute a criminal offense.
The law allowed for a defense wherein an employer could be exempted from criminal liability if it was satisfactorily proven that payment was impossible.

Section 2 of Act No. 2549, as amended by section 3 of Act No. 3085, prescribed penalties including fines ranging from one hundred to one thousand pesos and imprisonment for not less than one month nor more than one year, or both.

The alleged facts did not constitute any offense as per the information filed.
Even if they did, the penal law under which he was charged was unconstitutional for violating the constitutional prohibition against imprisonment for debt.

The trial court sustained the demurrer and declared unconstitutional the last part of section 1 of Act No. 2549 (as amended by Act No. 3958).

The basis of this ruling was that imprisoning a person for non-payment, even in cases of fraudulent intent, contravened section 1 (12), Article III of the Constitution.

The case was dismissed with costs of the offense imposed, prompting the Solicitor-General to appeal the decision.

Whether the penalty imposed under the last part of section 1 of Act No. 2549 (as amended by Act No. 3958) is valid given the constitutional prohibition against imprisonment for debt.
Whether the refusal to pay wages, when the employer is capable of doing so, falls within the ambit of fraudulent behavior warranting criminal sanctions.

Whether the exercise of police power by the legislature appropriately authorized the imposition of criminal liability on employers who deliberately refuse to pay due salaries.
The extent to which such legislation is aimed at protecting laborers from economic abuse and fraud by employers.

Whether the action of non-payment under these circumstances is analogous to defrauding someone of a just debt, similar to estafa under the Revised Penal Code.
The legal distinction between a mere debt obligation and a fraudulent act intended to cause financial harm to employees.