Up until now I have thought that there was only one institution in this country that made laws. Have I been wrong all along? Are there in fact two law-making institutions in this country?
I am asking these questions because recently I was furnished with a copy of Clearing House OM (CHOM 15-460) issued last year to all the members of the Philippine Clearing House Association (PCHA). Naturally, the memorandum has to do with the use and disposition of checks and, because the legal definition of a check is contained in the Negotiable Instruments Act (NIA), has a bearing on the Act. Section 185 of the NIA defines a check as a “bill of exchange drawn on a bank payable on demand.”
Of the 196 provisions of the NIA, one of the most important —because of the concept of negotiability – is Section 14. This section states, in part, that “(w)here the instrument is wanting in any material particular, the person in possession thereof has a prima facie authority to complete it by filling up the blanks therein, (a)nd a signature on a blank paper delivered by the person marking the signature in order that the paper may be converted into a negotiable instrument operates as a prima facie authority to fill it up as such for any amount.”
And what is “any material particular”? Section 125 of the NIA provides the answer. “Any alteration which alters the effect of the instrument in any respect is a material alteration.” Six such alterations are specified by Section 125: the sum payable (for principal and/or interest), the number or the relations of the parties, the date, the time or place of payment, the currency of payment and a place of payment that was not originally specified.
How has the PCHA come into the picture?
The subject of CHOM 15-460 is “Non-Acceptance of a Check with Erasure, Alteration and/or Deficiency” and a subsequent clarificatory Memorandum Circular (No. 3043, dated January 6, 2016) speaks of the “Drawee Bank (having) the authority to decide to ‘pay’ or ‘not pay’ if it deems that the alteration/erasure is unauthorized.”
At the outset I posed the question whether PCHA was authorized to amend a law – specifically the NIA, which regulates the issuance, use and disposition of checks – because, the NIA being a law, its provisions can be amended only by Congress. They cannot be amended by a private entity, which PCHA is, or even by the Bangko Sentral ng Pilipinas. Proposals to change the NIA, however meritorious and necessary, must be coursed through the banking committees of the Senate and the House of Representatives.
PCHA is doing a good job of ensuring that the issuance and use of checks—one of the prime tools of present-day commerce—are carefully regulated and properly monitored. Undoubtedly, the misuse and abuse of checks is wreaking havoc on many a transaction and many a business establishment.
But amending laws is the business of Congress alone. Let the Congressional committees make the proper amendments to NIA Sections 14 and 125 – with PCHA’s assistance – to bring that old law into line with the 21st century.
E-mail: rudyromero777@yahoo.com